August 12, 2004

Contract signed for first Chinese-built LNG tankers

China's first LNG shipbuilding contract was signed yesterday in Beijing, according to China Daily.

Hudong-Zhonghua Shipbuilding (Group) Co Ltd, a subsidiary of China State Shipbuilding Corp (CSSC), is to build three LNG vessels, each with a capacity of 147,200 cu.m.

China Daily says Hudong-Zhonghua began its study on LNG ship construction in 1999. To date, 90 percent of the ships' design and 80 percent of the equipment order have been completed.

The ships are for an LNG project in China's southern Guangdong Province that is slated for operation in mid-2006, will importing over 3 million tons of LNG from Australia annually.

The first two LNG vessels, representing a total investment of US$400 million, will be delivered in October 2007 and in early 2008. The third will be delivered later.

The ships are "jointly invested by China Shipping (Group) Co, China Merchants Group Ltd, Upper Horn Investments Ltd of Guangdong Yuedian Group, Shenzhen Marine Company, Australia LNG Pty. Ltd (ALNG), and the Energy Transportation Group," reports China Daily.

New York City based Energy Transportation Group, Inc., cochaired by Kimball and Kendall Chen, is the LNG Shipping Advisor to the Guangdong LNG Transportation Project Office. ETG advisory responsibilities include counsel on technical specification, financing, insurance, vessel specification, shipyard identification, shipbuilding contracts, transportation agreement and cost.

Each ship will be able to deliver about 1.42 million tons of LNG a year from Withnell Bay in Australia to Dapeng Bay in Guangdong.

Before the first vessel is delivered, ALNG will provide a vessel to meet the requirements of shipping LNG in the initial period.

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