China's first 175,000 cubic-meter large LNG vessel built by a private shipyard is about to be put into operation.
According to TradeWind, the global renowned commodity trading giant Mercuria Energy Group has confirmed to lease one of the two 175,000 cubic-meter large LNG transport ships built by Yangzijiang Shipyard. The lease term is approximately 4-5 years. The rent is calculated based on 88% of the freight rate of the BLNG2 (Mid-Atlantic/European Continent) route on the Baltic Exchange.
The new ship with the hull number YZJ2022-1475 has not been named yet and is scheduled to be delivered this month. Its sister ship YZJ2022-1476 will also be delivered in June. Market sources indicate that this ship is also expected to be leased by Mercuria.
These two ships are the first batch of Mark III Flex type large LNG transport vessels built by domestic private shipyards. They mark the continuous improvement of the international competitiveness of private enterprises in the LNG transport ship field and have become strong competitors in the global shipbuilding market.
The series of ships have a total length of 297 meters, a width of 46 meters, and a draft of 26.5 meters. The deck area is equivalent to three standard football fields. It integrates the cutting-edge technologies in the field of shipbuilding and is safe, energy-efficient, and highly intelligent. Many indicators have reached the world-leading level. The new ship uses the GTT Mark III Flex type film-based enclosure system. The main propulsion system adopts two dual-fuel MAN 5G70ME-C10.5-GA-EGRBP models, and is equipped with a 1.5-ton/hour regasification device.
It is understood that Yangzijiang Shipyard Group announced in October 2022 that it signed a construction contract for two 175,000 cubic-meter LNG transport ships with an European shipowner. This was the group's first large LNG ship order, and the implementation of this order made Yangzijiang Shipyard the fourth domestic shipyard and the first domestic private shipyard to enter the large LNG ship construction market.
At that time, the two new ships were respectively ordered by German shipowners Hammonia Reederei and Peter Dohle, with a unit price of approximately 235 million US dollars (about 1.591 billion yuan). The market generally believed that the project received support from the German government. However, the two shipowners later decided not to proceed with the related construction project and did not pay the advance payment.
Nevertheless, Yangzijiang Shipyard did not give up its strategic layout to enter the LNG shipbuilding field. Instead, it chose to bear the market risks by itself and continue to advance the project construction. These two ships were contracted by Yangzijiang Xinfu, and were originally planned to be delivered between the fourth quarter of 2025 and the second quarter of 2026.
Now that the Mercuria lease has been basically finalized, it means that the first batch of large LNG ships built by Yangzijiang Shipyard have successfully achieved commercial operation of the project.
As the largest privately-owned shipbuilding enterprise in China, Yangzijiang Shipbuilding Group was previously renowned for building three main types of ships: bulk carriers, oil tankers, and container ships. However, Yangzijiang Shipbuilding has been paying close attention to the liquefied gas ship market. In September 2022, the group officially signed a patent cooperation agreement for the Mark III membrane-based enclosure system with the French company GTT, obtaining GTT's qualification certification and acquiring the qualification to build large LNG transport ships using the GTT Mark III type membrane enclosure system.
When Yangzijiang Shipbuilding Group received the GTT license in September 2022, its chairman and CEO Ren Letao stated that Yangzijiang Shipbuilding hopes to "timely prove to the market that the shipyard has the necessary technology to build ships according to the current highest standards," and looks forward to cooperating with GTT to build LNG ships, ultra-large ethane transport ships (VLEC), and LNG-powered merchant ships.
In addition to LNG ships, Yangzijiang Shipbuilding also successfully received its first order for a VLEC ship and its first order for a VLAC ship in 2024, becoming the first privately-owned shipyard in China to build VLEC and VLAC. In June this year, the first built VLEC "ACS SP VOYAGER" vessel for the well-known Singaporean chemical company SP Chemicals was delivered and left the shipyard. This is the first VLEC built by a privately-owned shipyard in China.
For Mercuria, leasing Yangzijiang Shipbuilding's first batch of large LNG ships also reflects its strategic layout for continuous expansion of the fleet size.
It is understood that Mercuria is one of the largest energy and commodity trading companies in the world. It was founded by Marco Dunand and Daniel Jaeggi, former senior commodity traders of Goldman Sachs, in 2004. As a leading comprehensive commodity trading enterprise, Mercuria's business covers multiple key areas such as energy, metals, and agricultural products. The group's logistics layout is global, occupying an important position in the commodity supply chain. Its professional shipping operation team and mature global cargo pallet network have put forward continuous and high-quality shipping requirements for ships. Its profound industry background and outstanding operational capabilities provide a solid guarantee for the long-term reliable operation of ships.
In recent years, Mercuria has been active in the new shipbuilding market and has ordered new ships from several Chinese shipyards. Especially since the beginning of this year, Mercuria has cumulatively ordered 18 new ships from Chinese shipyards, with a total investment of approximately 1.42 billion US dollars (about 9.637 billion yuan).