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China VLCC seals crude shipping contract with Chinese refinery

China VLCC seals crude shipping contract with Chinese refinery
Joint venture firm China VLCC has sealed a two-year contract to provide seaborne crude oil transportation for Dalian-based refinery West Pacific Petrochemical Company (Wepec).

The two-year contract, agreed to be between 1 January 2015 to 31 December 2016, has an option for a one-year extension, according to a stock exchange announcement filed by China Merchants Energy Shipping (CMES).

China VLCC was established by CMES and Sinotrans & CSC Group in September 2014 to serve China’s rising demand for oil imports.

The CMES announcement did not specify the crude oil volumes to be shipped and the number of ships to be chartered by Wepec. The charter rates will be determined based on market levels, the announcement mentioned.

China VLCC currently operates 31 VLCCs after it recently took delivery of two newly-built oil tankers and one secondhand tanker.

Last week, the joint venture firm lined up time charters for two of its VLCCs with each going to oil majors BP and Shell.