China Merchants seeking Fujian LNG shipping deal

China Merchants seeking Fujian LNG shipping deal

Dow Jones, Singapore

Hong Kong-based China Merchants Transportation Holding Co. is keen to secure a contract for shipping liquefied natural gas from Indonesia to southeastern China's Fujian province, a China-based industry official told Dow Jones Newswires Monday.

He said the company has approached China National Offshore Oil Corp. and Fujian Investment & Development Co., the two investors in an LNG terminal to be built in Fujian, for a possible deal to ship LNG to the Fujian terminal.

One or two ships will be needed to accommodate the transportation of 2.6 million metric tons of LNG a year to Fujian, he said.

CNOOC and Fujian Investment & Development hold 60 percent and 40 percent each in the Fujian LNG terminal, to be built in 2004 and completed in 2007 or 2008. The LNG will be supplied from Indonesia.

He said China Merchants Transportation's interest in the Fujian LNG shipping follows its contract signed in August with CNOOC to ship 3 million tons per year of LNG to China's Guangdong province by 2005.

CNOOC has chosen China Merchants Transportation along with China Ocean Shipping Co., or COSCO, to jointly manage the shipping of LNG from Australia to Guangdong.

There will be three ships needed to service the Guangdong LNG route, he said, adding the ships will be built by Shanghai Hudong Shipyard at a cost of US$150 million each.

China Merchants Transportation is a unit of China Merchants Group, whose business involves oil shipping, property development and infrastructure construction.

China Merchants Transportation owns and operates an oil fleet made up of seven tankers with 300,000 tons deadweight each, one tanker with 150,000 tons deadweight each and eight tankers with 100,000 tons deadweight each.