China Shipping Development Co. (CSDC) has revealed plans to order six liquefied natural gas (LNG) carriers worth $1.2bn by June 2013.
CSDC chairman Li Shaode told reporters in Hong Kong that the contract means a 20-year shipping contract for the company, which is expected to bring stable earnings, according to Bloomberg Businesweek.
"We will expand the LNG transportation business to make it become a new profit growth driver as soon as possible," Shaode said.
The order is part of China’s aim to more than double LNG consumption to reduce its dependence on coal and oil.
Each vessel will be capable of carrying 174,000m³ of LNG and will be purchased by a company owned by Sinopec Group, CSDC and Mitsui OSK Lines (MOL).
The company said it has arranged syndicated loans to finance the acquisition of the LNG tankers, which are expected to cost $205m each.
Construction of the six vessels will be carried out at Hudong Zhonghua Shipbuilding, reportedly the only Chinese shipyard that has experience in building LNG tankers.
CSDC is currently in talks with two other Chinese shipyards for the construction of four additional vessels.
Earlier in January 2011, Hudong-Zhonghua won a $1bn order to build four LNG carriers for joint venture firms formed by MOL and CSDC.
Following their delivery in 2015-2016, the four LNG carriers will be used for transporting LNG from Australia and Papua New Guinea to China.