China: Longxue Shipyard, Dalian Shipbuilding to Build VLCCs for CMES ?

Shipowner China Merchants Energy Shipping (CMES) showed its readiness to make a big VLCC order as oil company Sinopec injects share cash, reports Eshiptrading. Last year in August, CMES revealed the intention to issue 858.3m shares to some major companies in order to raise CNY 2.9bn ($458mln) for a fleet expansion program.

Sinopec subscribed for 491m out of a total of 858m offered shares while China Life Insurance and a subsidiary of Sinochem Corporation subscribed for 214m shares and 153m shares respectively. One of the largest tanker operators in China stated earlier that it planned to spend CNY 5.6bn on vessel acquisitions.

Now that the company has successfully completed the private placement program it can proceed with the plan to order 10 new tankers, including VLCCs that in China could cost close to $90m each.

Reportedly, State-owned Guangzhou Longxue Shipyard and Dalian Shipbuilding Industry account for the favorites for at least two vessels each.

[mappress]

Shipbuilding Tribune Staff, March 16, 2012; Image: CMES