China Shipbuilders Secure $2.58 Billion Order for 20 Giant Oil Tankers
The 307,000-deadweight-tonne tankers are due for delivery in 2029-30 and will be designed to accommodate methanol and LNG dual-fuel systems.
China's shipbuilding industry has secured contracts worth approximately 17.22 billion yuan ($2.58 billion) to construct 20 very large crude carriers for companies linked to state-owned shipping group COSCO, reinforcing the country's position in the global market for large commercial vessels.
China CSSC Holdings said its wholly owned subsidiary, Dalian Shipbuilding Industry, together with China Shipbuilding Trading, had signed contracts with two COSCO-linked buyers for the construction of 20 oil tankers, each with a capacity of 307,000 deadweight tonnes.
The contracts were disclosed in company announcements submitted to the Shanghai and Hong Kong stock exchanges. The details were also reported by Reuters and specialist maritime publication iMarine.
Of the 20 vessels, 16 will be purchased by Oriental Fleet International, a subsidiary of COSCO SHIPPING Development, for approximately 13.43 billion yuan excluding tax. The remaining four will be acquired by Hainan COSCO Shipping Energy Transportation, a subsidiary of COSCO SHIPPING Energy Transportation, for approximately 3.79 billion yuan including tax.
The 16-vessel order is valued at approximately 839 million yuan per ship, while the four-vessel batch will cost approximately 948 million yuan per vessel, according to the respective company disclosures.
The vessels are classified as very large crude carriers, or VLCCs, a category of tanker generally designed to transport between 200,000 and 320,000 tonnes of crude oil. Their large capacity allows shipping companies to move substantial volumes of crude oil across long-distance international routes.
The new ships are scheduled for delivery between 2029 and 2030. Their designs include provisions for methanol and liquefied natural gas (LNG) dual-fuel systems, allowing them to be adapted to alternative marine fuels as the shipping industry faces increasing pressure to reduce emissions.
The 16 vessels ordered by COSCO SHIPPING Development will be built by Dalian Shipbuilding Industry and are expected to be leased to Pan Cosmos Shipping & Enterprises, a subsidiary of COSCO SHIPPING Energy, under 20-year bareboat charter arrangements.
Under a bareboat charter, the shipowner provides the vessel without crew or operational management, leaving the charterer responsible for operating the ship. The arrangement can give the owner a long-term income stream while allowing the shipping operator to expand its fleet without purchasing every vessel directly.
The lease period for the 16 ships is expected to run for 240 months, or approximately 20 years, from the delivery date of each vessel, subject to the terms disclosed in the company's filing with the Hong Kong Stock Exchange.
COSCO SHIPPING Development said the order would expand its ship-leasing business and provide a long-term source of revenue. The company is part of the wider COSCO SHIPPING group, which operates across shipping, logistics, container manufacturing and related maritime services.
The contracts also demonstrate the growing importance of the Chinese yuan in international shipping transactions. The 16-vessel contract is denominated and settled in cross-border yuan, while the four-vessel order is priced in onshore yuan.
The use of the Chinese currency in large shipbuilding contracts provides another example of how Chinese companies are developing yuan-based settlement arrangements in international business. However, the contracts alone do not indicate a major shift in the currency composition of global shipping finance.
China is already one of the world's leading shipbuilding countries, with major yards producing container ships, bulk carriers, oil tankers, liquefied natural gas carriers and other specialized vessels. Large orders from domestic shipping groups help provide a stable pipeline of work for shipyards and their equipment suppliers.
The new contracts also come as the global shipping industry prepares for stricter environmental requirements and uncertainty over future fuel costs. Methanol-ready and LNG-ready designs can offer operators greater flexibility, although the actual environmental benefits will depend on the fuels eventually used and their production methods.
For China's shipbuilding sector, the contracts strengthen the order books of domestic yards and support the development of larger, more technologically advanced vessels. For COSCO, the long-term leasing structure offers a way to expand crude oil transport capacity while spreading the financial and operational responsibilities across different subsidiaries.