Taiwanese joint venture to buy seven oil tankers

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.