COSCO SHIPPING Energy Transportation (CSET) is advancing a VLCC newbuilding programme that could ultimately cover 40 vessels, combining direct ownership with long-term leasing to secure future crude oil transport capacity.

In disclosures released on 9 November, the company detailed contracts for 10 owned very large crude carriers worth RMB9.482 billion (approximately US$1.412 billion), including tax, alongside plans to bareboat charter 14 newbuildings from six Chinese financial leasing companies. The proposed charters would run for up to 20 years per vessel, with aggregate rent over the full charter terms capped at RMB17.4 billion (US$2.591 billion).

The board also approved a separate long-term leasing and ship-finance cooperation project for 16 VLCC newbuildings. Xinde Marine News understands that these vessels form an additional batch, beyond the 10 owned ships and 14 proposed bareboat charters. Further agreements and approvals could therefore expand the latest programme to 40 ships.

Ten owned VLCCs at two Chinese shipyards

The 10 owned newbuildings will be commissioned by wholly owned subsidiary Hainan COSCO SHIPPING Energy. Six will be built by COSCO SHIPPING Heavy Industry (Yangzhou), with another four at Dalian Shipbuilding Industry Co. (DSIC). Both shipbuilding contracts were signed on 9 November, with an average tax-inclusive contract price of approximately RMB948 million, or US$141 million, per vessel.

The six-ship Yangzhou contract is worth RMB5.689 billion (US$847 million), including tax. Total project investment, including capitalised construction-period interest and supervision costs, is estimated at RMB5.743 billion (US$855 million). Deliveries are scheduled between August 2029 and November 2030. The ships will feature LNG-ready designs, energy-saving equipment and smart systems. The related-party transaction has board approval and remains subject to shareholder approval.

The four DSIC vessels carry a tax-inclusive contract value of RMB3.793 billion (US$565 million) and total project investment of approximately RMB3.829 billion (US$570 million). Deliveries are scheduled from September 2029 to May 2030, with LNG/methanol dual-fuel-ready specifications. This transaction has board approval and does not require a shareholder vote.

Combined investment in the 10 owned ships is approximately RMB9.572 billion (US$1.425 billion). Funding will come from internal resources and external financing, without using proceeds from capital-market fundraising. The contracts are denominated in renminbi, with payments in five instalments linked to construction progress.

CSET also approved a cash injection of RMB1.896 billion (US$282 million) into the Hainan subsidiary. For the Yangzhou project, the company said it compared price, technology, delivery schedules, payment terms and construction experience through a competitive quotation process, with the yard’s final offer below those of other independent shipbuilders.

Fourteen bareboat charters from six financial lessors

Wholly owned Pan Cosmos Shipping & Enterprises will implement the separate 14-vessel bareboat charter programme. Ten ships will have LNG dual-fuel propulsion and four will be conventionally fuelled. All will carry fixed rent, with individual charter terms of no more than 20 years from delivery. The ships are expected to be delivered progressively through the end of 2030. Shareholder approval remains pending.

Among the LNG dual-fuel vessels, Bank of Communications Financial Leasing will provide four, with full-term rent capped at RMB5.2 billion (US$774 million); ICBC Financial Leasing will provide three, capped at RMB3.9 billion (US$581 million); CITIC Financial Leasing will provide two, capped at RMB2.6 billion (US$387 million); and Minsheng Financial Leasing will provide one, capped at RMB1.3 billion (US$194 million). Each LNG dual-fuel ship therefore has a full-term rent cap of RMB1.3 billion.

Agricultural Bank of China Financial Leasing will provide three conventionally fuelled VLCCs, with aggregate rent capped at RMB3.3 billion (US$491 million). Bank of China Financial Leasing will provide one, capped at RMB1.1 billion (US$164 million). The corresponding per-vessel cap is RMB1.1 billion. All six leasing arrangements are denominated in renminbi. Shipyards, individual delivery dates and rent-payment schedules have not been disclosed.

A separate 16-ship project could lift the programme to 40

The board resolution also approved a long-term leasing and ship-finance cooperation project covering another 16 VLCC newbuildings. Xinde Marine News understands that these are additional ships, separate from the 24 vessels for which detailed transaction arrangements have already been announced.

The project constitutes a related-party transaction. The directors with an interest in the transaction recused themselves. The remaining directors approved the resolution by five votes in favour, with no votes against or abstentions. It had also been approved by a special meeting of independent directors and remains subject to shareholder approval.

CSET said it would make further regulatory disclosures after signing definitive agreements. Counterparties, investment value, propulsion specifications and delivery schedules will become clearer as the project progresses.

Strong tanker earnings support long-term investment

The expansion comes during a sharp improvement in CSET’s tanker earnings. Net profit attributable to shareholders reached RMB7.389 billion (US$1.100 billion) in the first nine months of 2026, up 171.90% year on year. Tanker revenue rose 51.5% to RMB22.324 billion (US$3.324 billion), while tanker gross profit reached RMB9.139 billion (US$1.361 billion), including RMB8.083 billion (US$1.203 billion) from international oil transportation. Transport volumes fell 10.2% over the same period, illustrating how freight rates and commercial deployment affected the result.

International peers are also reporting substantial profits. DHT’s third-quarter results, released on 9 November, showed average VLCC spot time charter equivalent (TCE) earnings of US$167,100 per day and quarterly net profit of US$270.9 million. Ordinary net income, excluding vessel-sale gains and interest-rate derivative fair-value movements, was US$234.5 million. Strong operating earnings give owners greater capacity to renew fleets and commit capital to future ships.

CSET has been expanding LNG, LPG, chemical tanker and related logistics activities, while oil transportation remains central to its business. Its interim report describes a combination of international tanker market exposure and comparatively stable earnings from domestic oil transportation and LNG shipping. The VLCC programme continues investment in that core business as the wider energy logistics platform develops.

ADNOC shows why control of ships commands a premium

Current exceptional tanker returns depend partly on geopolitical disruption and operating inefficiencies, whose duration is uncertain. Those same disruptions have also increased the value energy companies attach to access to ships and dependable cargo delivery.

ADNOC Logistics & Services provided a clear example on 7 August, announcing approximately US$1.3 billion of acquisitions covering six VLCCs and five very large gas carriers. It said the investment would support ADNOC’s growing production, trading and export activities. The six VLCCs and three gas carriers were acquired in the secondhand market, with the company stating that the vessels would enter ADNOC service immediately after delivery.

Some transactions carried substantial premiums for immediate availability. Riviera reported that ADNOC L&S bought the 2011-built VLCC Olympic Leopard for about US$115 million, against contemporary European broker valuations of approximately US$97 million to US$100 million for similar-aged ships. Veson Nautical subsequently reported in October that valuations for some 15-year-old VLCCs had moved above newbuilding levels, reflecting the high value of tonnage available to trade immediately.

Transport security risks have also directly affected ADNOC’s fleet. On 14 July, ADNOC L&S confirmed that its owned VLCC Al Bahyah and the time-chartered Mombasa B had been attacked while transiting the Strait of Hormuz, with both vessels sustaining significant damage.

For an oil exporter, transport links production and sales contracts to completed customer deliveries. Disruption can delay shipments, affect contractual performance and interrupt export revenue. A vessel available for immediate deployment consequently has value beyond its expected freight earnings: it can improve the owner’s ability to organise voyages and maintain commercial commitments. This helps explain why energy companies may accept high acquisition prices to secure operational capacity.

An import-dependent economy faces the same transport question

China faces a corresponding requirement at the receiving end of the oil supply chain. National Bureau of Statistics data show that the country imported 577.73 million tonnes of crude oil in 2025, up 4.4%. The US Energy Information Administration identifies China as the world’s largest crude importer, with most imports arriving by tanker. The scale of these flows links maritime transport closely to refinery feedstock supply, industrial activity and domestic energy consumption.

An oil purchase becomes usable energy only after loading, ocean transport, discharge, storage and onward distribution. For a major importing economy, a modern fleet under dependable long-term control improves the ability to organise that process alongside diversified suppliers, transport routes and port infrastructure. Exporters need access to customers; importers need continuity of supply. Both depend on ships being available when cargoes must move.

CSET has previously made this rationale explicit. Its 2025 announcement on six bareboat-chartered VLCCs identified national energy transport security, fleet development and stronger control over VLCC capacity as project objectives. The latest owned and leased newbuilding plans continue that approach.

Xinde Marine News has also explored the strategic value of shipping through discussions with BW Group Chairman Andreas Sohmen-Pao and the broader debate about ships, ports, waterways and seafarers as strategic assets. In oil transportation, the practical questions are specific: can an operator obtain suitable tonnage for a loading window, adjust deployment when cargo flows change, and support customers’ supply schedules consistently?

Fleet renewal requires decisions years before delivery

The 2029–2030 delivery window for the owned ships shows the planning horizon behind the investment. Large tankers require shipyard capacity, design and procurement work, construction, trials and commissioning before they can enter service. ADNOC’s secondhand purchases address immediate requirements; CSET’s newbuilding commitments prepare for fleet needs several years ahead.

Existing vessels will also be older by the time these ships arrive. Maintenance downtime, fuel consumption and customer vetting can affect their employment. Continuous renewal creates room for older ships to leave the fleet while sustaining service capability. CSET explicitly identified improvement of its international tanker fleet’s age profile as an objective of the new orders.

The propulsion mix also reflects decisions about initial investment and future operation. Fuel-ready designs preserve conversion options, while LNG dual-fuel ships offer an installed alternative-fuel capability. Their lifetime economics will depend on fuel availability, operating costs, conversion requirements and the performance of energy-saving and digital systems.

Ownership and leasing must connect with customers and operations

The combination of owned ships and long-term bareboat charters follows CSET’s established approach to capacity procurement. In Xinde Marine News’ June coverage of COSCO SHIPPING’s capital markets day, the company described balanced newbuilding investment and prudent development, using direct construction, financing partnerships and long-term chartering to secure strategic capacity while retaining flexibility through shorter charters and pools.

CSET said the 14-vessel charter project would supplement scarce VLCC capacity, expand international crude transport services and market share, and reduce overall financing costs and initial capital outlay. Direct ownership and long-term leasing allow investment to be arranged around cash flow, funding conditions and deployment plans, with financial lessors contributing asset financing alongside shipbuilding and operating expertise.

Fixed rent improves cost visibility while creating a continuing payment obligation. Actual returns will depend on cargo coverage, financing costs, vessel utilisation and maintenance. CSET’s 2026 action plan calls for stronger global hubs and route networks, greater access to resources, and a measured mix of buying, building and chartering. Its tanker business already employs vessels through spot voyages, time charters, contracts of affreightment and pools, serving oil companies, traders and independent refiners.

That commercial network matters as much as the new hulls. More controlled capacity can help coordinate loading and discharge windows and respond to changing cargo programmes. Crewing, technical management, safety systems, insurance and port services must develop with the fleet if additional ships are to deliver reliable transportation.

The next cycle will test the investment

Energy transport requirements, fleet renewal and customer demand give CSET a long-term rationale for investment. The delivery horizon nevertheless places the owned vessels in a potentially different supply environment.

A 3 November analysis from S&P Global Energy, citing CERA projections based on newbuilding and scrapping assumptions, forecast global VLCC capacity rising from 273.31 million dwt in 2025 to 359.28 million dwt in 2029, an increase of 31.5%. It identified 2028–2029 as a period of substantial large crude tanker deliveries.

New ships, retirements, changing crude trade routes and vessel productivity will jointly determine future freight markets. CSET will need to integrate its incoming capacity with customer commitments, deployment planning and cost control. Sustainable returns also fund the maintenance, seafarer development and reinvestment needed to preserve transport capability.

The wider industry significance is the growing value placed on dependable access to energy shipping. Exporters, importers and traders are increasingly considering fleet control alongside freight costs and asset prices. For the new wave of VLCC investment, the commercial task is to turn that long-term access to ships into reliable cargo delivery and earnings that endure through changing market conditions.