State-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) yesterday inked an agreement with two local shipping companies to form a NT$29.7 billion (US$921 million) oil tanker venture, which is a part of CPC’s efforts to overhaul its aging fleet of oil vessels through cost-efficient approaches.
The new entity, Global Energy Maritime Co Ltd (環能海運), formed with private shipping companies U-Ming Marine Transport Corp (裕民航運) and Chinese Maritime Transport Ltd (CMT, 中國航運), would handle 40 percent of the 28 million tonnes of oil that CPC imports per year after completing its oil vessels.
PHOTO: CNA
To maintain cost flexibility, CPC rents vessels from other shipping companies to transport 60 percent of imported oil products and it hopes to keep the ratio unchanged in the future.
“The deal will help reduce the burden of national coffers and will also help CPC enter the oil shipping business without the operational limits that most state-run companies face,” CPC acting chairman Chu Shao-hua (朱少華) said.
CPC currently operates eight single-hull oil tankers and needs to revamp its aging fleet by 2015, when a new and stricter maritime rule takes effect and global oil tanker operators will have to upgrade their vessels to double-hull oil container ships to reduce the risk oil spillage during transportation, CPC vice president Lin Maw-wen (林茂文) said.
Global Energy Maritime, which is expected to begin operating next month, may order the first of six very large crude carriers and a small double-hull oil tanker by the end of this year, the statement said.
CPC declined to reveal the name of potential ship builders by saying that Global Energy Maritime’s board would make the decision as soon as possible. Global Energy Maritime plans to build or buy those oil tankers during the seven-year period between this year and 2016, according to the statement.
CMT chairman John Peng (彭蔭剛) yesterday said he would suggest ordering at least two vessels by year-end as shipbuilding costs have come down by between 35 percent and 50 percent over the past few years.
Peng also said now was the best time to invest.
“We have entered into this venture because of lower shipbuilding costs,” Peng said.
Last year, CMT replaced the nation’s No. 2 container shipping company, Yang Ming Marine Transport Corp (陽明海運), to become CPC’s new partner after Yang Ming pulled out of talks, which began in 2006, as it became more cautious about new investments amid the global economic recession.
CPC will be the biggest shareholder by owning a 48-percent stake in the Global Energy Maritime, while U-Ming Marine and CMT will hold 26 percent share each, according to a joint company statement.
The companies plan to arrange a syndicated loan of NT$19.7 billion to fund the formation of Global Energy Maritime.
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