Nine Chinese yards sign LNG agreement
Through subsidiaries CLNG Finance and CLNG Finance, China LNG has agreed to provide finance lease services for Jiangsu Dajin Heavy Industries Co, Jiangsu An Shun Shipbuilding Co, Jiangsu Jiangbei Ship Industry Co, Jiangsu Qinfeng Shipbuilding Co, Pizhou City Dongfang Ship Repairing and Building Co, Pizhou City Suhang Shipping Co, Jiangsu Hehai Shiping Co, Wuhu Hongri Shipping Co and Honghua Marine Oil and Gas Equipment (Jiangsu) Co.
In total the financing amounts to RMB4.8 billion (US$754.19 million). The facilities are to be used for the building of LNG-fuelled vessels or the conversion of diesel vessels to run on LNG. The companies have committed to building LNG vessels for a competitive price and to an efficient timetable.
The partners have also agreed to join with China LNG in investing in LNG bunker stations at ports along the coast where each company operates. China LNG will assist with planning and permissions, and will be the preferred partner of fuel supply to these facilities.
All parties will also have access to further funding for the leasing of LNG vessels at favourable rates. They have also committed more generally to promoting LNG as a clean energy source, and to recommending China LNG to their customers.
The agreements are non-binding and will be in effect for two to three years, with further specific agreements needed for individual projects.
In a statement China LNG said: “The group is committed to promoting the application of LNG – through engaging in the finance leasing business for LNG vehicles, vessels and equipment and investment in natural gas midstream and downstream projects – to relieve the pollution problem in China.”
The initiative marks a major expansion of China LNG’s finance business, which has previously been focused on the country’s market for LNG-fuelled heavy vehicles.
In another important step in the LNG vessel market, the company announced a joint deal with Maifutong International Finance Leasing to provide RMB457.2 million (US$71.79 million) towards the building of 200 LNG-fuelled vessels for LNG Power Shipping Co, which transports construction materials and waste on Shanghai’s inland waterways. The vessels are to be built by Hongua Offshore.
