China’s Dalian Shipbuilding Industry (DSIC) will build two LNG carriers for a joint venture consisting of China Gas, Wah Kwong Maritime Transport, and CSSC Shipping, according to shipbuilding sources.
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 Vantage Energy and CSSC Shipping’s Fortune Clean Energy.
China City Gas has a 30 percent stake in the JV, Vantage Energy owns 45 percent, and Fortune Clean Energy owns 25 percent.
According to China City Gas, the 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.
Sources told LNG Prime on Wednesday that DSIC will build these LNG carriers with delivery expected in 2027.
The sources said that the deal includes two firm 175,000-cbm LNG carriers and also two optional vessels.
China Gas, CSSC Shipping, and Wah Kwong are expected to pay about $235 million per vessel.
Moreover, the vessels are expected to have the same specifications as the eight ships China Merchants Energy Shipping (CMES), a unit of China Merchants Group, has on order at DSIC.
The CMES vessels feature the latest LNG dual-fuel low-speed main engine with integrated ICER system, a reliquefaction unit, and GTT’s Mark III Flex membrane containment system.
China Gas to pay up to $100,000 per day for vessel charter
Following delivery, the LNG carriers will serve China Gas Hongda Energy Trading, a unit of China Gas, under 20-year charter deals.
The charter hire for each LNG carrier will be at a daily hire rate of about $80,000 to $100,000, payable on a monthly basis, China Gas said in the statement.
China Gas said it considers such rate “to be reasonable having compared the current market rate of charter hire by reference to the type of the LNG vessels.”
The firm said that the formation of the JV and the chartering of the LNG vessels will allow it to secure LNG vessels for its LNG business development and diversified business models.
Earlier this year, China Gas Hongda Energy Trading signed two 20-year deals to buy LNG from US LNG exporter Venture Global LNG.
China Gas will buy 1 million tonnes per annum (mtpa) of LNG on a free on board (FOB) basis from Plaquemines LNG and another 1 mtpa from the CP2 LNG export facility, both in Louisiana.