Dalian Shipbuilding Industry (DSIC) has secured contracts for twenty 307,000-dwt very large crude carriers, accounting for half of COSCO SHIPPING Energy Transportation’s newly disclosed 40-vessel programme. The order brings together direct ownership, financing through COSCO SHIPPING Development and long-term bareboat employment, with deliveries scheduled for 2029–2030. The latest disclosures establish the shipyard and ownership structure for a further 16 ships, while the transactions remain subject to the relevant approvals.

According to a filing dated 12 November by China CSSC Holdings, its wholly owned subsidiary DSIC, together with China Shipbuilding Trading, signed the contracts with Hainan COSCO SHIPPING Energy Transportation and Oriental Fleet International. Hainan, a wholly owned subsidiary of COSCO SHIPPING Energy, is ordering four ships directly. Oriental Fleet, wholly owned by COSCO SHIPPING Development, will own the other 16 and charter them to COSCO SHIPPING Energy’s Pan Cosmos Shipping & Enterprises. These are the additional 16 VLCCs previously identified by Xinde Marine News outside the initial package of ten owned newbuildings and fourteen bareboat-chartered vessels. The signing of the associated charter agreements on 11 November gives that separate tranche a defined ownership and operating structure.

Four Direct Orders and Sixteen Ships for Long Term Charter

All 20 DSIC vessels are specified as 307,000-dwt VLCCs with provisions for future methanol and LNG fuel conversion. Hainan’s four ships carry a combined contract price of RMB3.793 billion, approximately US$564.65 million, including tax, or RMB948.25 million, approximately US$141.16 million, per vessel. Oriental Fleet’s 16 ships are priced at RMB13.42512 billion, approximately US$2.00 billion, excluding tax, equivalent to RMB839.07 million, approximately US$124.91 million, each. The four Hainan vessels will be paid for in domestic renminbi, while the 16-ship transaction uses cross-border renminbi settlement.

Hainan signed its four-ship contracts on 9 November. Including capitalised construction interest, supervision and related expenses, the project’s total investment is approximately RMB3.829 billion, or US$570.01 million. Deliveries are scheduled between September 2029 and May 2030, with funding from internal resources and external financing. COSCO SHIPPING Energy’s board has approved the investment, which does not require approval from its shareholders.

The 16 Oriental Fleet vessels are scheduled for delivery from October 2029 through December 2030. COSCO SHIPPING Development said it sought quotations from three major yards capable of constructing and delivering comparable ships, assessing capacity, pricing, delivery dates, payment terms and building experience. Each vessel has a separate construction contract, with consistent principal terms for ships of the same type. Contractual remedies link delivery timing, speed, deadweight and main-engine fuel consumption to price adjustments and, where the agreed thresholds are breached, rejection or termination rights.

China CSSC Holdings said the construction contracts become effective after the parties complete their required approval procedures. The 16-ship investment requires shareholder approval at COSCO SHIPPING Development, while the related bareboat arrangement requires shareholder approval at COSCO SHIPPING Energy.

DSIC Takes Half of the Forty Ship Programme

The DSIC package comprises four ships already included in COSCO SHIPPING Energy’s ten-vessel direct-order programme and the additional 16 ships financed through COSCO SHIPPING Development. Together, they account for 6.14 million dwt and 50% of the newly disclosed 40-vessel programme.

ArrangementShipsBuilder or asset ownerDisclosed financial termsDirect ownership6Hainan; COSCO SHIPPING Heavy Industry YangzhouRMB5.689bn, approximately US$846.91m, including taxDirect ownership4Hainan; DSICRMB3.793bn, approximately US$564.65m, including taxExternal bareboat charters14Six Chinese financial lessors; shipyards undisclosedUp to RMB17.4bn, approximately US$2.59bn, in total hire over the charter periodsGroup bareboat charters16Oriental Fleet ownership; DSIC construction; Pan Cosmos operationRMB13.42512bn, approximately US$2.00bn, construction price excluding tax

From COSCO SHIPPING Energy’s perspective, ten ships will be directly owned and thirty obtained through long-term charters. Chartered capacity therefore represents 75% of the programme, drawing on both the group’s ship-finance platform and external financial leasing institutions. The separate 14-vessel arrangement involves BOCOM, ICBC, Agricultural Bank of China, Bank of China, CITIC and Minsheng financial leasing companies. Charter periods are no more than 20 years, with the ships expected to be delivered progressively by the end of 2030.

The fuel specifications also vary across the programme. The six Yangzhou ships are LNG-ready; the 20 DSIC ships provide for future methanol and LNG conversion; and the 14 vessels from external lessors comprise ten LNG dual-fuel ships and four conventionally fuelled ships. The shipyards for the latter group have yet to be disclosed.

Financing the Assets and Securing Twenty Years of Employment

COSCO SHIPPING Development will finance the 16-ship asset investment with approximately 25% internal funding and bank loans. Applied to the disclosed contract price, the internal contribution would be about RMB3.356 billion, or US$499.64 million. Shipyard payments are divided into five instalments: the first four together account for 50%, and the fifth accounts for the remaining 50%. That final instalment represents approximately RMB6.713 billion, or US$999.28 million, across the series, making the timing of loan drawdowns and vessel deliveries material to the financing plan.

Under the agreements signed on 11 November, Pan Cosmos will bareboat-charter each vessel for 240 months, plus or minus 90 days at the charterer’s option, starting from its individual delivery date. COSCO SHIPPING Energy will operate the ships within its own ship-management system. Each vessel is to be returned to Oriental Fleet when its charter expires, placing the expected end of employment around 2049–2050.

The structure assigns different responsibilities to the two listed companies. COSCO SHIPPING Development holds the assets, finances their acquisition and receives long-term charter income, while retaining exposure to financing costs and the vessels’ residual values. COSCO SHIPPING Energy obtains long-term operating rights and deploys the ships against its customer relationships and cargo network. For the operator, the purchase expenditure is replaced by rental payments spread over the charter period; for the owner, the investment comes with a designated long-term charterer.

An Eight Plus Eight Charter Model Shares the Market Cycle

Eight vessels will earn fixed bareboat hire, while the other eight combine a base rate with market-linked sharing payments. Across all 16 ships, the average fixed daily hire is RMB116,520 per vessel, approximately US$17,346, excluding tax. Once all ships are on hire, multiplying that average by 16 vessels and 365 days gives a fixed annual component of approximately RMB680.48 million, or US$101.30 million, before the additional sharing payments.

The variable component is initially linked to the monthly average of the Baltic Exchange’s TD3C time-charter equivalent, or TCE. Below the agreed sharing benchmark, the relevant ships pay the base hire. Above it, additional hire is calculated under the agreed mechanism. Sharing payments are settled quarterly, with dollar amounts converted using the monthly average renminbi central parity rate published by the China Foreign Exchange Trade System.

The announcement illustrates the formula at an assumed exchange rate of RMB6.50 per US dollar:

Daily hire in RMB = base daily hire + (TD3C-TCE in US dollars per day × 3.25) − RMB86,482.50.

Within the applicable sharing range and at that illustrative exchange rate, a US$10,000-per-day increase in the benchmark adds RMB32,500 to daily hire for a participating vessel. This gives the asset owner exposure to stronger tanker markets while leaving the operator with the remaining operating return after its rental and other costs.

The contracts also allow Pan Cosmos to request a switch from TD3C-TCE to TD15-TCE when the agreed trigger conditions are met. The parties may establish another sharing mechanism by mutual agreement. TD3C represents Middle East Gulf-to-China employment, while TD15 represents West Africa-to-China employment. The switching provision creates a contractual way to adjust the rental reference as trading conditions change.

Based on the two indices’ performance since 2017 and its expectations for the following 20 years, the company estimates combined annual sharing payments for the eight ships at no more than RMB320 million, approximately US$47.64 million. A six-VLCC charter project disclosed in October 2025 used the same broad approach, with three fixed-rate ships and three on base-plus-sharing terms. That earlier project is separate from the current 40-vessel programme.

Series Construction and Fuel Choices

China CSSC Holdings described DSIC as China’s first VLCC builder and the contracted design as a new generation of its internally developed VLCC product. A series of 20 ships gives the yard scope to coordinate design work, procurement, block construction and dock capacity over a sustained building programme. For the eventual operator, common specifications can also simplify maintenance planning, spare-parts inventories and crew familiarisation. Capturing those benefits depends on consistent technical standards and delivery execution.

The methanol and LNG provisions preserve options for future conversion as fuel availability, prices and emissions requirements develop. Their value will depend on the eventual conversion scope and economics, alongside the ships’ fuel consumption, reliability and maintenance requirements. The ships’ employment extends towards mid-century, leaving both owner and operator exposed to future fuel costs and regulatory changes.

Strategic Capacity Meets the Delivery Cycle

COSCO SHIPPING Energy enters this investment phase with substantially stronger earnings and operating cash flow. For the first nine months of 2026, net profit attributable to shareholders reached RMB7.389 billion, approximately US$1.10 billion, up 171.90% year on year. Net cash generated from operating activities was RMB10.368 billion, approximately US$1.54 billion, up 114.96%. Combining direct orders with long-term charters allows the company to use different sources of capital while managing the timing of its fleet expenditure.

The importance energy companies attach to vessel availability is visible on the export side as well. In August, ADNOC Logistics & Services announced an approximately US$1.3 billion acquisition of six VLCCs and five VLGCs to support ADNOC’s production, trading and export growth. Nine of those ships were acquired on the secondhand market for rapid deployment. COSCO’s programme addresses capacity several years ahead, securing ships for the period when new deliveries and ageing vessels will reshape the operating fleet.

China’s crude import volumes illustrate the scale of the transport task. Against 2025 imports of approximately 577.73 million tonnes, a hypothetical system carrying every cargo in VLCC parcels of 300,000 tonnes would require about 1,926 laden voyages annually. At six such voyages per ship per year, that corresponds to roughly 321 VLCCs; at four to eight voyages, the range is approximately 240–480 ships. Actual requirements depend on the seaborne share of imports, cargo sizes, supply origins and complete voyage cycles, including ballast legs, loading, discharge and waiting time.

For comparison, the latest publicly reported operating fleets of COSCO SHIPPING Energy and China Merchants Energy Shipping total about 100 VLCCs, including chartered vessels. Their ships serve international customer networks, and this figure describes the scale of the two principal state-owned tanker platforms. In its latest 16-vessel announcement, COSCO SHIPPING Energy explicitly identified greater control over VLCC capacity and support for energy supply-chain security as project objectives.

The ships will nevertheless enter the market under the supply-and-demand conditions prevailing in 2029–2030. An S&P Global Energy analysis published on 3 November, citing CERA forecasts and assumptions about deliveries and scrapping, projected global VLCC capacity to rise 31.5%, from 273.31 million dwt in 2025 to 359.28 million dwt in 2029. It identified 2028–2029 as a period of particularly heavy VLCC and Suezmax deliveries.

Concentrated deliveries would test the commercial assumptions behind these investments. Long-term charters secure vessel access, fixed and variable hire distribute market exposure, fuel provisions preserve conversion choices, and series construction offers scope for operating and manufacturing efficiencies. Returns will depend on how effectively the ships are integrated with cargo commitments, deployment and cost control. For DSIC, the 20-vessel package adds a substantial construction programme; for the owner and operator, the next stages are approvals, financing, building and delivery, followed by employment across successive tanker-market cycles.