China Merchants, Sinotrans forming $1.1 bln crude oil tanker JV
SHANGHAI Aug 12 (Reuters) - Two of China's largest shipping firms are setting up a $1.1 billion crude oil tanker joint venture with a view to build up the country's fleet, as the world's second-largest oil consumer seeks better control over its oil imports.
State-backed firms China Merchants Energy Shipping Co Ltd and Sinotrans & CSC Holdings are forming a very large crude carrier (VLCC) joint venture, with the former providing $566 million in assets, including nine VLCCs, for a 51 percent stake, and the latter pumping in $544 million in cash.
Oil consumption in China reached its highest level in 17 months in June. The government has previously announced that it will invest billions of dollars to expand its oil and gas tanker fleet.
The venture, which will buy more second-hand vessels or order new ships once established, aims to "form one of the world's leading tanker fleet by scale, increase both parties' share of transporting China's oil imports and international market competitiveness", China Merchants said in a statement late on Monday.
The deal is expected to be finalised by Sept. 30.
Sinotrans & CSC's oil shipping arm, Nanjing Tanker, this year became the country's first state-backed firm to delist from a domestic exchange after posting four consecutive years of loss. It is in the process of restructuring. (Reporting by Brenda Goh; Editing by Muralikumar Anantharaman)