Taiwanese joint venture to buy seven oil tankers
Keith Wallis in Shanghai
An oil transport joint venture planned by three Taiwanese companies, including government-owned CPC Corp, will spend about US$700 million to buy seven tankers that will transport about 40 per cent of the petroleum giant's oil needs.
The joint venture, Global Energy Marine, also includes Taiwan-listed shipping company U-Ming Marine Transport Corp and Chinese Maritime Transport, which has links with Hong Kong's Tung shipping family. It will be formally launched in the next few weeks.
U-Ming Marine president C.K. Ong said the joint venture would acquire six oil tankers capable of carrying about 300,000 tonnes each and a smaller tanker of 80,000 deadweight tonnes. The seven ships would be capable of carrying 7.5 million tonnes of oil a year.
Ong said the current price of a 300,000 dwt crude carrier was about US$110 million to US$120 million in Japan or South Korea, and US$95 million to US$100 million on the mainland.
He said the three partners initially budgeted US$1 billion for the seven ships, but the price of new vessels had since fallen to about US$700 million.
Shipbrokers said the price of new tankers could fall further after the recent drop in charter rates, which are down about 25 per cent.
Ong, who was in Shanghai for the launch of a 177,000 dwt dry cargo bulk carrier that will be part-owned by U-Ming Marine, said the establishment of Global Energy Marine had been approved by Taiwan's legislature.
The company will charter ships from other owners before its own are delivered.
Ong gave no indication of how soon they would arrive, but a ship ordered now from a shipyard on the mainland or South Korea could be delivered in 2012, while a second-hand vessel could be delivered within about two months, brokers said.
About 30 per cent of the cost of the new ships would come from the joint-venture company's internal resources while the remaining 70 per cent would be from bank loans.
Ong said Taiwanese banks would be favoured because they could offer favourable rates of about 100 basis points above the London interbank offered rate (Libor). European banks would offer rates of about 200 to 250 basis points above Libor.
Both U-Ming Marine and Chinese Maritime Transport are mainly focused on the dry bulk cargo sector and they have a fleet of 180,000 dwt capesize dry bulk carriers. U-Ming Marine also has a very large crude carrier, jointly owned with Wah Kwong.
The current price of a very large crude carrier is at least, in US$: $95m