Today (November 23 local time), Tokyo Electric Power Co. (TEPCO) founded
a new company, named "Cygnus LNG Shipping Limited" in Nassau, Bahamas,
for the purpose of owning an LNG ship for the Sakhalin II Project.
The foundation of the new company is joined and invested by NYK Line and
Mitsubishi Corp.
Aiming at diversifying the forms of transaction to procure LNG and
reducing the LNG procurement cost, TEPCO has already introduced an
FOB-based LNG procurement scheme(1) that makes full use of LNG ships,
etc., and has been promoting the ownership and shipping operations of LNG
ships since 2000.
The newly founded company is aimed at owning the fourth LNG ship for
TEPCO's LNG project. The ship is slated to start transporting LNG from
the Sakhalin II Project (see Appendix 2) in January 2009.
The new company will take delivery of the ship from Mitsubishi Heavy
Industries, Ltd. (scheduled in December 2008), and the crew employment
and ship maintenance and management are scheduled to be contracted out
to NYK Line
Moreover, "LNG Marine Transport Co.(2)," a subsidiary of TEPCO, will be
responsible for the operation management of the ship under a time
charter party(3) to be concluded with the new company.
TEPCO will continue to maintain low-cost and stable procurement and
transport of LNG by capitalizing on its know-how accumulated through the
ownership and operations of LNG ships.
Notes:
(1)FOB-based LNG procurement scheme that makes full use of LNG ships
TEPCO has already been engaged in LNG shipping operations, using LNG
ships owned by its subsidiaries. Specific examples are listed below.
FOB (Free on Board) refers to a transaction wherein ownership and
risk-bearing are transferred from the seller to the buyer when LNG is
loaded onto the LNG tanker at the seller's shipping terminal. The
buyer provides maritime insurance and transport, and incurs all
insurance fees and shipping expenses.
LNG ship owned by Pacific LNG Shipping Limited, a subsidiary of
TEPCO (founded in December 2000), has been operated since October
2003 for the Malaysia Project.
LNG ship owned by Pacific Eurus Shipping Limited, a subsidiary of
TEPCO (founded in February 2002), is scheduled to start shipping
operations for the Darwin Project in April 2006.
TEPCO signed a time charter contract with a subsidiary of NYK Line
in December 2004 for the operations of an LNG ship that will be
placed in service for the Darwin Project in April 2008.
LNG Marine Transport Co., a subsidiary of TEPCO, is scheduled to be
responsible for the operation management of the LNG ship (scheduled
for delivery in March 2009) owned by "Pacific Hope Shipping Limited"
(founded in August 2005) that was founded jointly by Kyushu Electric
Power Co., TEPCO and others for the LNG project (undecided) that
Kyushu Electric plans to purchase.
(2)LNG Marine Transport Co.
Location: 1-1, Shimbashi 1-chome, Minato-ku, Tokyo
President: Makoto Kawaguchi
Founded on: October 5, 2004
Description of business: Maritime transport of liquefied natural gas,
and an agency thereof.
The company is responsible for the operation
management of the three LNG ships (one of
which is already placed in service) that
TEPCO has decided to introduce, the LNG ship
(Ship 4) to be owned by the newly founded
company, and the LNG ship owned by "Pacific
Hope Shipping Limited" that was founded by
TEPCO and Kyushu Electric Power Co. for joint
ownership of the ship.
Capitalized at: 95 million yen
Investment stake: TEPCO accounts for 70%, NYK Line for 15%, and
Mitsubishi Corp. for 15%.
(3)Time charter party
A type of contract entered into by a ship user and a ship owner.
Under the contract, a user charters a ship for a specified period of
time, and the user pays the owner of the ship a charter hire.
Appendix 1:Outline of New Company and LNG Ship
Appendix 2:Outline of Sakhalin II LNG Project
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