China Gas, Wah Kwong Maritime Transport, and CSSC Shipping have agreed to establish a new joint venture and order two more liquefied natural gas (LNG) carriers.
Hong Kong-based natural gas operator and distributor, China Gas, said in a statement on Tuesday that its unit China City Gas has entered into a joint venture agreement with Wah Kwong Maritime’s Summit Energy and CSSC (Hong Kong) Shipping’s Fortune Clean Energy.
China City Gas has a 30 percent stake in the JV, Summit Energy owns 45 percent, and Fortune Clean Energy owns 25 percent.
According to China Gas, the Ocean Jade Investment JV will set up two wholly-owned special purpose vehicles for the purpose of acquiring and owning each of the LNG vessels to be designed and built by a third party shipbuilder.
The company did not reveal the name of the yard or any additional information regarding the vessels.
LNG Prime was the first to report in January, citing shipbuilding sources, that the three companies are expected to order two more LNG carriers from Dalian Shipbuilding Industry (DSIC) this year.
The first JV, Sea Jade Investment, ordered two 175,000-cbm LNG carriers at DSIC in August last year.
Also, the first two vessels will feature WinGD dual-fuel low-speed engines with integrated ICER system, a reliquefaction unit, and GTT’s Mark III Flex membrane containment system.
DSIC is scheduled to deliver the first two vessels in 2027, and each of these ships were tipped to be worth about $235 million.
Charter
China Gas said its unit currently expects to commit $142.8 million in the new company.
Based on its 30 percent share, it could mean that the LNG carriers are each worth a bit more than $235 million.
Following delivery, the JV’s two new LNG carriers will also serve China Gas Hongda Energy Trading, a unit of China Gas, under 20-year charter deals, China Gas said.
Moreover, the charter hire for each LNG carrier will be at a daily hire rate of about $87,000 to $100,000 per month, it said.
China Gas said the company considers such rate to be “reasonable” having compared the current market rate of charter hire by reference to the type of these LNG vessels.