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K-Line/Chubu Electric Power Sign LNG Tanker Chartering Contract
= For transporting LNG from Freeport =
Kawasaki Kisen Kaisha Ltd. announced on December 11 that it entered into an LNG tanker chartering agreement with Chubu Electric Power Co., Inc. for 20 years. The agreement is for transporting LNG from Freeport LNG with which Chubu has a toll-liquefaction agreement. At the same time, K-Line signed, for the above charter, an agreement with Kawasaki Heavy Industries to build a MOSS-type LNG tanker of 164,700 m3 in storage capacity. The new vessel will be completed by the end of 2016.

The chartering agreement is the second one for K-Line with Chubu, following the first one, signed in 2013, for transporting LNG from Wheatstone LNG, Australia. The ownership of the tanker for Freeport LNG will most probably belong to K-Line with a possibility in the future of joint ownership with Chubu.

K-Line so far ordered 5 tankers in total including the one for Freeport as above and those for INPEX and Petronet, India. Upon completion of the five, the shipping line's fleet will become 48.

Chubu's contract with Freeport is for 2.2 million tonnes per year of LNG, requiring 4 - 5 tankers per year for transportation, considering the 400,000 tpy by one tanker for transporting LNG between the U.S. Gulf and Japan. Therefore, as the above-mentioned chartering agreement with K-Line is the first one for Freeport, Chubu needs to charter 3- 4 more tankers for the transportation.

Osaka Gas, having also a toll-liquefaction agreement with Freeport LNG, is said to be considering to charter 3 - 4 more tankers for the agreement.

Demand for tankers on a long-term basis is actually increasing among the LNG offtakers, having contracts with U.S. suppliers whose start-up of the projects are coming near. Demand for tankers for the new projects in Mozanbique, Australia and so on will be added in the future. In addition, as the

recent tendency, demand for short-term charters is coming in.

K-Line's basic strategy is to meet the demand for long-term charters but is also prepared to meet new demand, such as the short-time ones.
last modified : Wed 17 Dec, 2014 [10:19]
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