Two Japanese partnerships order new LNG carriers

Eric Watkins
Senior Correspondent

LOS ANGELES, Nov. 15 -- Nippon Yusen Kaisha (NYK) Line has signed partnership agreements with two other Japanese firms for joint ownership of LNG carriers.

In the first, NYK and Tokyo Gas Co. subsidiary Tokyo LNG Tanker Co., Ltd., both of Tokyo, signed a joint ownership contract with Kawasaki Shipbuilding Corp. for construction of a 177,000 cu m capacity LNG carrier.

The companies also signed a heads of agreement for joint ownership and a long-term charter for the carrier.

NYK Line will hold a 90% stake in the ship, while Tokyo LNG will hold the remaining 10%. NYK Line also was appointed ship manager under the 20 year-term time charter that will start from 2011, when the vessel will be completed.

Construction of the tanker will start in fiscal 2009. The Moss-type carrier will be equipped with four spherical tanks and will be equipped with a Kawasaki advanced reheat turbine plant for propulsion, enabling 15% higher fuel efficiency.

After its completion, the ship will transport LNG from the Northwest Shelf Expansion, Malaysia I and III, the Darwin Project, Sakhalin-2, Pluto, and Gorgon among others.

The agreement marks the second new carrier that NYK will co-own solely with Tokyo LNG Tanker, following a 153,000 cu m capacity carrier planned to be completed in 2009. After completion, this newbuild carrier will be used in an LNG transportation project for Tokyo Gas Co. Ltd., said NYK Line.

NYK-Mitsui deal
In another joint ownership deal, NYK and Mitsui raised $700 million through a syndicated loan to cover some 70-80% of the construction costs for four 145,000 cu m LNG carriers.

Mitsui and NYK will jointly own the four vessels, which are being built by Mitsubishi Heavy Industries and Kawasaki Heavy Industries. The first ship will be delivered in 2009, with the others being delivered in 2010-11.

NYK and Mitsui have already chartered these ships to Taiwan's Chinese Petroleum Corp. for 25 years. CPC will use the vessels to transport 3 million tonnes/year of LNG to Taiwan from Qatar.

Contact Eric Watkins at hippalus@yahoo.com.

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