COSCO approves 9,000-cubic-metre ethylene carrier at Dalian affiliate

By Amara Osei

China’s COSCO Shipping Energy Transportation has approved a 9,000-cubic-metre LNG dual-fuel ethylene carrier newbuilding with a stated project value of RMB335 million ($50.2 million). The Shanghai- and Hong Kong-listed shipowner expects the vessel to be completed within 18 months after the shipbuilding contract takes effect.

The board approved construction through Hainan Zhaogang Shipping, a subsidiary controlled by COSCO’s Dalian energy shipping business. Hainan Zhaogang is 87% owned by Dalian COSCO Shipping Energy Supply Chain, placing the vessel-owning vehicle within the group’s Dalian structure.

The project’s total investment cost is about RMB341 million ($51.1 million), including construction financing, supervision and other capitalised expenses. That all-in figure, rather than the RMB335 million headline, defines the capital COSCO must put behind the vessel.

Delivery remains conditional. The agreement still requires signing and completion of the parties’ approval procedures, so the 18-month construction clock starts only when the contract takes effect. COSCO Shipping Energy said the vessel “is expected to be completed within 18 months of the shipbuilding contract taking effect.”

The group also disclosed its yard selection. It had “compared offers from other independent yards before selecting one that sits within the wider COSCO Shipping Group,” COSCO said. The selected facility is affiliated Dalian COSCO Shipping Heavy Industry, putting the newbuild within the wider group rather than placing it at an outside shipyard.

COSCO’s statement establishes that benchmarking exercise but does not disclose yard-level prices, schedules or why the affiliated offer prevailed. The award gives Dalian COSCO Shipping Heavy Industry the construction work, yet it does not establish whether the yard offered the lowest price. Group ownership can make procurement tidier; it does not, on this evidence, prove a lower bid.

Financing will combine internal resources with external borrowing. COSCO Shipping Energy also approved a RMB122 million capital injection into its Dalian subsidiary. The announcement does not specify how much of the project comes from each source, leaving the debt-and-equity mix less transparent than the vessel’s headline cost.

What does this change for ethylene shippers?

Contracted ethylene capacity does not change today. No cargo, charter, trade lane or first loading has been disclosed, and the construction window cannot begin until the contract takes effect after signing and approvals.

What the project changes is COSCO’s forward fleet option. If the agreement clears and construction stays on schedule, the carrier will add one 9,000-cubic-metre dual-fuel ethylene unit to its owned gas fleet.

For COSCO as a carrier, that unit expands its deployment options after entry into service. It does not guarantee spot exposure, because no charter structure has been announced.

For forwarders, the vessel may become another owner-controlled platform for arranging ethylene movements. Without announced service or cargo terms, they cannot treat it as available spot tonnage.

For shippers, the practical answer is prospective capacity rather than immediate relief. A single additional vessel can broaden COSCO’s deployment choices once it enters service, although the announcement identifies neither a contracted cargo stream nor a rate reduction. Nothing in the project guarantees lower freight costs for any buyer.

The wider fleet program gives the order additional strategic context. Earlier this year, COSCO Shipping Energy ordered two 74,900-dwt Panamax crude tankers at COSCO Shipping Offshore Qidong for approximately $153 million. It separately ordered two 50,000-dwt MR product tankers at Guangzhou Shipyard International worth about $104 million.

Those stated commitments carry much larger price tags than the $51.1 million ethylene project, though vessel types and yard arrangements differ. Together, the three orders show COSCO spreading fleet capital across crude tankers, MR product tankers and gas carriers, with Dalian, Qidong and Guangzhou named as the construction platforms.

For COSCO’s tanker customers, the earlier orders add potential future hull capacity across two liquid cargo segments. For ethylene shippers, this newbuild is smaller in capital terms but adds a distinct gas carrier. All three orders expand COSCO-controlled fleet capacity across different cargoes, while the ethylene unit still lacks an announced cargo commitment.

If the agreement is signed and approvals clear, construction of the 9,000-cubic-metre dual-fuel carrier should finish inside the 18-month window. Until then, it is a prospective addition to COSCO’s gas fleet, not a near-term release of ethylene capacity.