Oil prices inched higher on…
After the national controversy surrounding…
Investment firm CBI Energy and Chemical plans to order up to 20 LNG carriers, probably at South Korean shipyards, in deals worth around US$3.8 billion, Reuters reported on Wednesday, quoting two people in the know.
CBI Energy and Chemical, held by Australian and Canadian investors, also wants to buy floating LNG production and import terminals in its attempt to grow in Asia and Africa. The firm will be seeking to take advantage of the low energy prices to procure supply at favorable prices, according to an email to Reuters sent by Tony Leung, director at CBI Investment Management Limited.
CBI Energy and Chemical’s business plans for Africa and Asia entail extraction of natural gas, sea transportation, power generation, chemical plants, LNG plants and an LNG distribution network, including retail gas.
“South Korea's LNG carriers are the best in terms of design, shipbuilding and delivery speed,” Reuters quoted an executive at CBI as saying.
If the deal were to materialize, it could help at least partially prop up South Korea’s ailing shipbuilding industry, which has been plagued by a decline in the shipping industry amid low commodity prices, low freight rates, global trade slowdown, and a vessel glut. In a sign that the industry is in a downturn, South Korea’s fourth-largest shipyard STX filed for receivership in May, and shipping company Hanjin filed for bankruptcy protection a few months later.
CBI Energy and Chemical’s move on the Asian gas market makes business sense, because according to the U.S. Energy Information Administration (EIA), Asia’s LNG imports rose in the first half this year, led by India and China. Japan, South Korea, China, India, and Taiwan combined accounted for 68 percent of global LNG imports last year. These five countries saw their combined imports rise by 1 percent in the first half this year, as higher Chinese and Indian imports more than offset declines in the mature LNG markets of Japan and South Korea, the EIA said.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…