Monday, January 17, 2011

Oil And Logistics Giants Order New Bulk Carriers

Four LNG Vessels for Exxon and MOL
Shipping News Feature

CHINA – Four new liquefied natural gas (LNG) vessels are to be built by the Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. (Hudong), a subsidiary of the China State Shipbuilding Corporation on behalf of the Exxon Mobil Corporation and Mitsui O.S.K. Lines Ltd. (MOL) the companies announced today. These are the vessels which we revealed were to be ordered in an article last March.

The new vessels will be jointly owned by MOL and the China Shipping (Group) under contract to Exxon to transport gas from the Papua New Guinea and Gorgon Jansz LNG projects to mainland China. A ceremony today celebrated the execution of a Project Development Agreement and a Heads of Agreement for Shipbuilding Contracts before a host of dignitaries.

The Exxon Mobil Corporation incorporates numerous affiliates including Esso and senior vice president Mr. Mark Albers commented:

“This project will provide a reliable source of clean energy to help China meet its growing energy demand. We are committed to working with our partners and Hudong to deliver high quality, reliable and cost effective LNG carriers for our LNG projects that will be competitive on a global scale.”

Mr. Akimitsu Ashida, chairman, Mitsui O.S.K. Lines said it was the first time MOL had sourced LNG ships from China and was sure the contract would be dealt with competently and professionally by all parties. Mr. Tan Zuojun, president of the China State Shipbuilding Corporation adding that his company was pleased to be selected by ExxonMobil and MOL as a partner in the China LNG shipping project and assuring all parties they "would work diligently to design, build and deliver four LNG carriers of the highest quality.”

The four ships are due to be delivered in 2015-16 to service Exxon and its collaborators in the PNG LNG project who in 2009 entered into a sales and purchase agreement with Sinopec for the long-term supply of LNG totalling approximately 2.0 million tonnes per annum. Also in the same year, an affiliate of ExxonMobil and PetroChina signed a sales and purchase agreement for the long-term supply of approximately 2.25 million tonnes per annum of LNG from ExxonMobil’s equity share of the Gorgon Jansz LNG project in Western Australia.

Last September MOL extended its depreciation period for LNG ships to 20 years from the 13 they had previously declared was the likely working life of such vessels. The decision was made based on the 80 or so vessels of the type that MOL was then operating and raised the value of their fleet accordingly.

Photo: Gas vessel IBRI LNG courtesy of MOL.