China Shipping Development Co Ltd said on Friday it had signed a 10-year contract with China Petroleum and Chemical Corp (Sinopec) to provide transportation for importing crude oil into China.
The shipping group said in a statement that the contract, aimed at limiting the impact of freight rate fluctuations, would run from July 1, 2006, with shipment volume starting at 3.5 million to 4.5 million tonnes in 2006 and 2007, increasing to 10 million to 12 million tonnes in 2010.
Sinopec will raise its shipment volume by 1 million to 2 million tonnes for each Very Large Crude oil Carrier (VLCC) acquired by China Shipping as it expands its transportation capacity, the company added.
It gave no value for the deal. The country's biggest coastal energy shipper said in March that it planned to increase capacity to meet strong energy demand from China and that it expected its profit to rise in 2006 despite weaker freight rates and high fuel costs. Shares in China Shipping gained 0.84 percent to HK$6 in early Friday trade.