COSCO orders 16 methanol-ready VLCCs for $2.01 billion

By Tom Whitfield

Shanghai-based COSCO SHIPPING Development said on Wednesday it had ordered 16 very large crude carriers (VLCCs) worth 13.43 billion yuan ($2.01 billion), with deliveries starting no earlier than late 2029.

The order links shipbuilding and asset funding to a 20-year charter before any tanker enters service. Oriental Fleet International, a unit of COSCO SHIPPING Development, signed contracts with affiliates of China State Shipbuilding Group for all 16 vessels.

The deal in numbers

• Fleet: 16 VLCCs, each rated at 307,000 deadweight tons and described as methanol- and LNG-ready.
• Price: 13.43 billion yuan ($2.01 billion), or about 839 million yuan per vessel; the dollar conversion uses $1 = 6.6742 yuan.
• Funding: internal resources combined with external financing.
• Construction: Dalian Shipbuilding Industry will build the tankers, with deliveries between late 2029 and 2030.
• Charter: all 16 vessels go to Pan Cosmos Shipping & Enterprises, a COSCO SHIPPING Energy unit, under 20-year bareboat charters.

The lease economics

Once deliveries begin, COSCO SHIPPING Energy expects annual rent for the 16 tankers to range from 680 million yuan to 1 billion yuan.

“The average daily rent amounted to 116,520 yuan/vessel, excluding tax,” the company said.

That gives the group a contracted income stream against assets it must fund years earlier, while fixing the vessels' employment for 20 years. COSCO said the leases will “provide long-term stable income and cash flow while expanding the scale of the group’s ship leasing business.”

Rent begins with handovers, not with signing the shipbuilding contracts, and the announcement gives no individual vessel dates inside the late-2029-to-2030 delivery window.

The structure matches a long construction lead time with a long cash-flow horizon. As announced, the lessee belongs to the same group, so ownership, charter counterparty and expected rent sit inside one corporate perimeter.

Rent is not a freight rate quoted for moving cargo. COSCO disclosed no voyage earnings, oil-volume allocation or market-rate assumption for these tankers, so the announcement cannot be translated directly into a forecast for tanker freight rates.

What does the order change for shippers and carriers?

For shippers, there is no immediate vessel-capacity addition or freight-rate change: the first delivery comes in late 2029, and COSCO announced no cargo contracts, trade lanes or service schedules for the tankers. The order does not mean an earlier lift or cheaper crude freight.

For carriers, all 16 ships are earmarked for Pan Cosmos under 20-year leases. They do not form an open pool of spot tonnage, and their contribution to broader tanker availability depends on the handover schedule and how Pan Cosmos deploys the chartered fleet.

Forwarders should apply the same timing. Any assessment of tanker supply, vessel availability or charter rates has to look toward the 2029-2030 delivery window, not the day of the order.

A VLCC has a deadweight tonnage typically ranging from 200,000 to 320,000 metric tons. These 307,000-deadweight-ton ships therefore sit near the upper end of the class.

The methanol- and LNG-ready designation identifies the vessels' intended fuel flexibility, but COSCO supplied no fuel-system specifications, emissions data or cargo commitments. Shippers should treat it as a vessel specification, not evidence of a new alternative-fuel trade lane.

COSCO SHIPPING Development, a unit of China’s COSCO SHIPPING Corporation, mainly produces standard dry cargo containers, refrigerated containers, special containers and related equipment. This order takes the unit beyond manufacturing into long-term financing and leasing of maritime assets.

For freight buyers, the only defensible forecast is no new capacity from this order before late 2029; rates could respond later, but the announcement alone does not establish their direction.