MOL's Participation in China FOB Transportation Project
April 30, 2013
We are very pleased to announce that MOL has participated in both the ownership of six new LNG ships to be built in China by Hudong-Zhonghua Shipbuilding (Group) Co.,Ltd. (Hudong) and the associated ship-management agreements through the relevant joint ventures that are already formed in Hong Kong with MOL's participation stake of 20 % for each joint venture. The remaining 80 % stake is held for each entity by our Chinese partners, who are China Shipping (Group) Company and China Petroleum & Chemical Corporation (known as Sinopec).
All of the six new LNG ships are earmarked by way of long-term charters for Sinopec's FOB sale and purchase agreement of LNG with Australia Pacific LNG. They will be delivered to the owning joint ventures from early 2016 to late 2017. Total consideration for the construction of the six ships is approximately USD1.5billion. Long term limited recourse debt financing (approximately USD 1.2 billion) are secured for the six ships with a syndicate of banks with involvements of The Export-Import Bank of China, Industrial and Commercial Bank of China Limited, Bank of China Limited, Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, LTD. and Mizuho Corporate Bank, LTD., advised by Sumitomo Mitsui Banking Corporation as Financial Advisor.
This is MOL's second big milestone in the emerging China LNG transportation sector after our participation in the ExxonMobil China project, where four new LNG ships are being built by Hudong with the first ship's delivery slated for early 2015. We take a high pride in this achievement, particularly in that
- MOL's experience and expertise in LNG transportation has been accepted by our Chinese partners,
- Good working relations between the two sides have contributed to the success of our participation in the project, and
- MOL's LNG presence in this project will be enhanced for further cooperation.
With our participation in this project, the Chinese parties will set up a sound and solid base for the ship-management services for the six new LNG ships, including the provision of supervision services during the ship-construction period. MOL's (five) technical experts are already stationed in Shanghai to work together with our Chinese partners for various preparations for this particular project that are required to ensure the construction of quality LNG ships in a safe manner.
Our good partnership with the Chinese partners will not only remain unchanged but also will be further strengthened for our mutual benefit to overcome any difficulties that may arise in the future. MOL is fully committed to assist the Chinese partners to make this ambitious project a success.