Sinotrans Pacts for Five Yamal LNG Tankers

Maritime Activity Reports, Inc.

December 23, 2015

Pic: Sinotrans Shipping

Pic: Sinotrans Shipping

 Chinese shipping major Sinotrans has signed with Greek shipowner Dynagas and China LNG Shipping (CLNG) for the joint purchase of five Arctic-class LNG carriers from South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME).

The agreement is structured as five separate joint ventures between the parties; each venture includes membership in the shipbuilding contract and in a 25-year time charter of the vessel to Yamal LNG. The time charter is for about $20 million per month per vessel.
Upon the JV completion, the company indirectly owns 25.5% in the deal, whereas CLNG holds 25.5 percent stake and  Dynagas the remaining 49 percent.
Total construction cost for the five vessels is estimated at $1.6 billion. The newbuildings are scheduled to be delivered between 30 November 2017 to 31 March 2019. The vessels represent one third of Yamal's planned fleet.
The 172,410 cu m ice-breaking LNG vessels will be on time-charter for the Yamal LNG project. The ships will be leased to Yamal for a term commencing from their deliveries until 31 December 2045, with extension options for two five-year periods. 
Sinotrans announced on 21 September 2015 that it was in talks with certain parties on participation in a possible joint venture to commission the building of five Arctic LNG carriers to engage in the LNG Arctic shipping business.
“The entering into of the shipbuilding contract transactions and the time charter transactions signifies a milestone for the group’s participation in the growing LNG transportation market and expansion of its existing chartering business through the ownership of 25.5% of the JV companies and its strategic relationship with Dynagas and CLNG,” Sinotrans Shipping said.
Yamal LNG is a joint venture between NOVATEK (60 percent), TOTAL (20 percent) and China National Oil & Gas Exploration and Development Corporation (CNODC) (20 percent). The project consists of three LNG trains with a total capacity of approximately 16.5 million metric tons of LNG per annum.
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