News Releases in 2006
July 11, 2006
A joint bid by Nippon Yusen Kaisha (NYK) and Mitsui & Co. Ltd. proffering the use of four new vessels on long-term time charters (between 23 and 24 years) for the transport of liquefied natural gas (LNG) has been accepted by Taiwan's Chinese Petroleum Corporation (CPC).* A joint venture between NYK and CPC is being planned to managed the LNG carriers.
The deal concerns the transport of some three million tons of LNG a year from Qatar to Taiwan through an agreement that CPC has reached with Ras Laffan Liquefied Natural Gas Company Ltd. II (RasGas II) as part of the Qatar LNG Project. Seven major shipping companies made bids on a tender floated by CPC.
Taiwan, the sixth-largest LNG importer in the world, purchases some 5.8 million tons a year and is working aggressively to use LNG as a new energy resource. Taiwan is also a promising market because demand for LNG there is projected to grow in the future. This long-term contract will represent the first maritime transport of LNG to Taiwan on an FOB (free on board) basis.
NYK made vigorous efforts from the very beginning to win this contract. These efforts enabled the NYK-Mitsui team to succeed over the other contenders. NYK and Mitsui found CPC, the leading petroleum company in Taiwan, to be highly reliable and believe that this project will be of great significance for the Asia market.
Demand for clean energy resources is on the rise due to surges in crude oil prices and greater concern for environmental issues. Current projections have worldwide LNG demand doubling by 2010. Making the most of experience that NYK has gained through the seaborne transport of LNG to Japan, which accounts for 60 percent of the global total, the company will continue to develop a more competitive fleet to keep pace with growing demand.
Details of the Contract:
| Shipowners: | Nippon Yusen Kaisha (NYK) and Mitsui & Co. Ltd.(Chinese Petroleum Corporation (CPC) and Qatar Gas Transport Company Ltd. (QGTC) might take stakes in the project) |
| Charterer: | Chinese Petroleum Corporation (CPC) |
| Term: | 23-24 years from 2009 and 2010 (an extension of five years will occur if an option is exercised) |
| Ships to be deployed: | Four 145,000-cubic-meter-capacity MOSS-type LNG carriers (newbuildings) |
| Shipyards: | Kawasaki Shipbuilding Corp., which will build two of the newbuildings, and Mitsubishi Heavy Industries Ltd., which will be responsible for the other two |
| Ship management: | A joint venture will be set up by NYK and CPC |
*Chinese Petroleum Corporation (CPC)
CPC, which was established in 1946, is Taiwan's largest state-run petroleum company. Capitalized at NT$130.1 billion, it earned revenues of NT$668.2 billion in 2005.
