China's energy security concerns drive oil tanker tie-up

China VLCC, a joint venture between China Merchants Group and Sinotrans & CSC Group, represents Beijing's latest ambition to secure its energy supply chain.

The company, incorporated in Hong Kong in September with US$1.1 billion in issued share capital, will operate about 40 very large crude carriers - supertankers each measuring more than 300 metres long and able to carry 2 million barrels of crude.

"China is increasingly reliant on imported crude. Such vast demand calls for the establishment of a national carrier specialising in oil shipping to ensure supply chain security," China VLCC chairman Su Xingang told the South China Morning Post.

The world's second-largest net oil importer, China's dependence on foreign crude has grown steadily, from 56.4 per cent of the country's total crude demand in 2011 to a projected 59.4 per cent next year, data from the International Energy Agency shows.

China will import 6.3 million barrels a day next year to fuel the world's second-largest economic engine, the agency forecasts.

Su, who is also the vice-chairman of China Merchants, said China VLCC was able to fulfil one-third of the mainland's crude imports.