US grants COSCO Haineng subsidiary sanctions exemption
- Author:Josie
- Source:Search network
- Release Date:2019-10-26
Shun Tak Maritime Network quoted Reuters Washington on October 24 - The US Treasury Department issued a sanction exemption permit for nearly two months on Thursday, so that the relevant companies have settled business with a Chinese tanker company. The US sanctioned the company last month, saying it was transporting Iranian crude oil.
According to the notice from the Office of Foreign Assets Control of the US Treasury Department, this exemption is valid until December 20th, allowing “maintenance or termination” of transactions with COSCO Shipping Tankers (Dalian), including unloading. Non-Iranian crude oil.
The Trump administration unilaterally imposed sanctions on four Chinese shipping companies in late September on the grounds of illegal shipments of Iranian oil, including the COSCO Dalian subsidiary.
Worries about sanctions have led to a sharp rise in global shipping costs for oil and liquefied natural gas. According to Xindehai.com, VLCC freight rates have soared to a rare level of over $300,000 per day (see: → Tanker market soars to 30 years) The highest, how long can the hot market last?). The U.S. Treasury Department said that the exemption on Thursday applies to Dalian COSCO Offshore Oil Transportation Co., Ltd., and any entity in which the company holds 50% or more of the shares.
The US Treasury Department stated that this exemption does not authorize any transaction or activity with COSCO Shipping Tanker (Dalian) Seaman and Ship Management Co. Ltd. Earlier this month, a source told Reuters that a supertanker from Dalian COSCO Shipping Oil Transportation Co., Ltd. was temporarily exempted from US sanctions and was allowed to unload crude oil.
After the news, Nordic American Tankers shares fell 10% to $3.18, Top Ships fell 6.7% to 3.19, DHT Holdings fell 4% to $7.38, and Euronav fell 3.6% to $11.15.
On October 19, Vice Premier Liu He attended the 2019 World VR Industry Conference and pointed out that the new round of high-level economic and trade consultations between China and the United States has made substantial progress in many fields and laid an important foundation for signing the phased agreement.
According to previous reports, the United States hopes that China can import more US soybeans, crude oil, LNG and other products.
China is the world's largest crude oil market. As of June this year, its crude oil imports this year were about 9.7 million barrels per day. Before the Sino-US trade dispute in the first half of 2018, China was the largest importer of US crude oil, with an average daily import volume of 377,000 barrels. In February of this year, US crude oil exports fell to 41,600 barrels per day. On September 1, China began to impose a 5% tariff on US crude oil imports, which may lead to further decline in US oil and liquefied natural gas exports to China.
Although US exporters have increased their crude oil exports to India and South Korea, they are still unable to compensate for the losses caused by the Chinese market. US shale oil and gas exploration and production companies have grown to 12.4 million barrels per day in September, so they have to face pressure from production growth and falling oil prices. For example, a year ago, West Texas Intermediate crude oil price was about $75, but only $55.47 was reported at the end of September 2019. Driven by the growth of low-sulfur oil production, the production in the Permian Basin has increased to 4.5 million barrels per day, while domestic refineries are designed to handle heavy high-sulfur mixed crude oil, making it difficult to find a market in China. . To this end, US energy companies have cut spending on new drilling and completions. The number of US rigs is currently 860, the lowest since February 2018.
In terms of LNG, China is the second largest importer of LNG in the world after Japan. According to the US Energy Information Administration (EIA), in the first six months of 2018, US LNG accounted for 7% of China's total LNG imports, and China handled 33 shipments throughout the year. In contrast, Xinhua News Agency pointed out in a report in July that in the first six months of 2019, China imported only three batches of LNG from the United States. Fortunately, US LNG exporters have successfully found a market in Europe. This year, the European market has accounted for 40% of US LNG exports. Currently, there are 10 LNG export projects awaiting approval from the US Federal Energy Regulatory Commission, and the Sino-US trade war casts an uncertain shadow on these projects. These projects invest billions of dollars, so it is necessary to ensure long-term customers in order to be commercially viable. It is estimated that by 2024, China's LNG imports will increase by at least 40%, which is a huge market with rapid growth, and the United States needs to intervene. However, current uncertainties are delaying the final investment decisions for these projects. The energy industry also indirectly bought a single import tax for US steel. Steel pipes require steel, and steel tariffs not only increase new construction costs, but also exacerbate the uncertainty of the new export pipeline project at the Gulf of Mexico port. For example, Plains AllAmerican Pipeline LP plans to impose a fee on users of its new oil pipeline to compensate for the rise in steel costs. The Sino-US trade war has not only slowed down the demand for oil in China, the world's fastest-growing economy, but also in Europe and the United States. Now, there is concern that there will be a recession that will further curb global demand for oil and gas.
As early as September 20 this year, at the press conference held by the National Energy Administration at the State New Office, Zhang Jianhua, director of the National Energy Administration, responded to the question of whether trade friction between China and the United States affects China’s energy diversification. It is a double loss. If there is no trade friction, China can import a large amount of crude oil and natural gas from the United States, but the increase of tariffs makes it impossible for enterprises to afford and cannot import. He said that he hopes to end the Sino-US trade friction as soon as possible, and then he can expand China's imports of crude oil and natural gas from the United States.
According to the latest news from Reuters, the Chinese government issued tariff exemption quotas to major domestic and international soybean crushers on Tuesday. The total import of up to 10 million tons of US soybeans will be exempted from high tariffs. According to sources, at a meeting of the National Development and Reform Commission of China, China issued US soybean import tariff exemption quotas to state-owned and private crushing companies, as well as large international trading companies with crushing plants in China. According to two US export sources, the exemption was for US cargo in March.
On the 23rd, COSCO Ocean Energy Transportation Co., Ltd. issued the “Announcement on the completion of shareholder change by China LNG Transportation (Holdings) Co., Ltd.”.
According to the announcement, China LNG Transportation (Holdings) Co., Ltd. (hereinafter referred to as “CLNG”) was originally a joint venture company of Dalian Zhongyuan Marine Oil Transportation Co., Ltd., a wholly-owned subsidiary of COSCO Ocean Energy Transportation Co., Ltd., held by Dalian Oil Transportation Co., Ltd. 50% equity of CLNG.
On October 21, 2019, CLNG completed the shareholder change, and Dalian Oil Transportation transferred its 50% CLNG equity to the company (hereinafter referred to as “CLNG shareholder change”). CLNG shareholder changes have been completed in accordance with the relevant laws and regulations of the Hong Kong Special Administrative Region of the People's Republic of China.
Dalian Oil Transportation is a wholly-owned subsidiary of the Company. The Company's transfer of 50% CLNG equity held by Dalian Oil Transportation did not constitute a connected transaction and did not constitute a major asset restructuring.
CLNG was established in March 2004 with a registered capital of Hong Kong and a registered capital of US$460.69 million. It is mainly engaged in LNG transportation business by co-investing with other partners to establish a project company.
According to the notice from the Office of Foreign Assets Control of the US Treasury Department, this exemption is valid until December 20th, allowing “maintenance or termination” of transactions with COSCO Shipping Tankers (Dalian), including unloading. Non-Iranian crude oil.
The Trump administration unilaterally imposed sanctions on four Chinese shipping companies in late September on the grounds of illegal shipments of Iranian oil, including the COSCO Dalian subsidiary.
Worries about sanctions have led to a sharp rise in global shipping costs for oil and liquefied natural gas. According to Xindehai.com, VLCC freight rates have soared to a rare level of over $300,000 per day (see: → Tanker market soars to 30 years) The highest, how long can the hot market last?). The U.S. Treasury Department said that the exemption on Thursday applies to Dalian COSCO Offshore Oil Transportation Co., Ltd., and any entity in which the company holds 50% or more of the shares.
The US Treasury Department stated that this exemption does not authorize any transaction or activity with COSCO Shipping Tanker (Dalian) Seaman and Ship Management Co. Ltd. Earlier this month, a source told Reuters that a supertanker from Dalian COSCO Shipping Oil Transportation Co., Ltd. was temporarily exempted from US sanctions and was allowed to unload crude oil.
After the news, Nordic American Tankers shares fell 10% to $3.18, Top Ships fell 6.7% to 3.19, DHT Holdings fell 4% to $7.38, and Euronav fell 3.6% to $11.15.
On October 19, Vice Premier Liu He attended the 2019 World VR Industry Conference and pointed out that the new round of high-level economic and trade consultations between China and the United States has made substantial progress in many fields and laid an important foundation for signing the phased agreement.
According to previous reports, the United States hopes that China can import more US soybeans, crude oil, LNG and other products.
China is the world's largest crude oil market. As of June this year, its crude oil imports this year were about 9.7 million barrels per day. Before the Sino-US trade dispute in the first half of 2018, China was the largest importer of US crude oil, with an average daily import volume of 377,000 barrels. In February of this year, US crude oil exports fell to 41,600 barrels per day. On September 1, China began to impose a 5% tariff on US crude oil imports, which may lead to further decline in US oil and liquefied natural gas exports to China.
Although US exporters have increased their crude oil exports to India and South Korea, they are still unable to compensate for the losses caused by the Chinese market. US shale oil and gas exploration and production companies have grown to 12.4 million barrels per day in September, so they have to face pressure from production growth and falling oil prices. For example, a year ago, West Texas Intermediate crude oil price was about $75, but only $55.47 was reported at the end of September 2019. Driven by the growth of low-sulfur oil production, the production in the Permian Basin has increased to 4.5 million barrels per day, while domestic refineries are designed to handle heavy high-sulfur mixed crude oil, making it difficult to find a market in China. . To this end, US energy companies have cut spending on new drilling and completions. The number of US rigs is currently 860, the lowest since February 2018.
In terms of LNG, China is the second largest importer of LNG in the world after Japan. According to the US Energy Information Administration (EIA), in the first six months of 2018, US LNG accounted for 7% of China's total LNG imports, and China handled 33 shipments throughout the year. In contrast, Xinhua News Agency pointed out in a report in July that in the first six months of 2019, China imported only three batches of LNG from the United States. Fortunately, US LNG exporters have successfully found a market in Europe. This year, the European market has accounted for 40% of US LNG exports. Currently, there are 10 LNG export projects awaiting approval from the US Federal Energy Regulatory Commission, and the Sino-US trade war casts an uncertain shadow on these projects. These projects invest billions of dollars, so it is necessary to ensure long-term customers in order to be commercially viable. It is estimated that by 2024, China's LNG imports will increase by at least 40%, which is a huge market with rapid growth, and the United States needs to intervene. However, current uncertainties are delaying the final investment decisions for these projects. The energy industry also indirectly bought a single import tax for US steel. Steel pipes require steel, and steel tariffs not only increase new construction costs, but also exacerbate the uncertainty of the new export pipeline project at the Gulf of Mexico port. For example, Plains AllAmerican Pipeline LP plans to impose a fee on users of its new oil pipeline to compensate for the rise in steel costs. The Sino-US trade war has not only slowed down the demand for oil in China, the world's fastest-growing economy, but also in Europe and the United States. Now, there is concern that there will be a recession that will further curb global demand for oil and gas.
As early as September 20 this year, at the press conference held by the National Energy Administration at the State New Office, Zhang Jianhua, director of the National Energy Administration, responded to the question of whether trade friction between China and the United States affects China’s energy diversification. It is a double loss. If there is no trade friction, China can import a large amount of crude oil and natural gas from the United States, but the increase of tariffs makes it impossible for enterprises to afford and cannot import. He said that he hopes to end the Sino-US trade friction as soon as possible, and then he can expand China's imports of crude oil and natural gas from the United States.
According to the latest news from Reuters, the Chinese government issued tariff exemption quotas to major domestic and international soybean crushers on Tuesday. The total import of up to 10 million tons of US soybeans will be exempted from high tariffs. According to sources, at a meeting of the National Development and Reform Commission of China, China issued US soybean import tariff exemption quotas to state-owned and private crushing companies, as well as large international trading companies with crushing plants in China. According to two US export sources, the exemption was for US cargo in March.
On the 23rd, COSCO Ocean Energy Transportation Co., Ltd. issued the “Announcement on the completion of shareholder change by China LNG Transportation (Holdings) Co., Ltd.”.
According to the announcement, China LNG Transportation (Holdings) Co., Ltd. (hereinafter referred to as “CLNG”) was originally a joint venture company of Dalian Zhongyuan Marine Oil Transportation Co., Ltd., a wholly-owned subsidiary of COSCO Ocean Energy Transportation Co., Ltd., held by Dalian Oil Transportation Co., Ltd. 50% equity of CLNG.
On October 21, 2019, CLNG completed the shareholder change, and Dalian Oil Transportation transferred its 50% CLNG equity to the company (hereinafter referred to as “CLNG shareholder change”). CLNG shareholder changes have been completed in accordance with the relevant laws and regulations of the Hong Kong Special Administrative Region of the People's Republic of China.
Dalian Oil Transportation is a wholly-owned subsidiary of the Company. The Company's transfer of 50% CLNG equity held by Dalian Oil Transportation did not constitute a connected transaction and did not constitute a major asset restructuring.
CLNG was established in March 2004 with a registered capital of Hong Kong and a registered capital of US$460.69 million. It is mainly engaged in LNG transportation business by co-investing with other partners to establish a project company.