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MOL’s Participation in China FOB Transportation Project

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MOLWe  are very pleased to announce that MOL has participated in both the ownership of  six new LNG ships to be built in China by Hudong-Zhonghua Shipbuilding (Group)  Co., Ltd. (Hudong) and the associated ship-management agreements through the  relevant joint ventures that are already formed in Hong  Kong with MOL’s participation stake of 20 % for each joint venture.  The remaining 80 % stake is held for each entity by our Chinese partners, who  are China Shipping (Group) Company and China Petroleum & Chemical  Corporation (known as Sinopec).

All  of the six new LNG ships are earmarked by way of long-term charters for  Sinopec’s FOB sale and purchase agreement of LNG with Australia Pacific LNG.  They will be delivered to the owning joint ventures from early 2016 to late  2017. Total  consideration for the construction of the six ships is approximately  USD1.5billion.  Long term limited recourse debt financing (approximately USD 1.2 billion) are  secured for the six ships with a syndicate of banks with involvements of The  Export-Import Bank of China, Industrial and Commercial Bank of China Limited,   Bank of China Limited, Sumitomo Mitsui Banking Corporation, The Bank of  Tokyo-Mitsubishi UFJ, LTD. and Mizuho Corporate Bank, LTD., advised by Sumitomo  Mitsui Banking Corporation as Financial Advisor.

This  is MOL’s second big milestone in the emerging China LNG transportation sector  after our participation in the ExxonMobil China project, where four new LNG  ships are being built by Hudong with the first ship’s delivery slated for early  2015. We take a high pride in this achievement, particularly in  that

  • MOL’s  experience and expertise in LNG transportation has been accepted by our Chinese  partners,
  • Good  working relations between the two sides have contributed to the success of our  participation in the project, and
  • MOL’s  LNG presence in this project will be enhanced for further  cooperation.

With  our participation in this project, the Chinese parties will set up a sound and  solid base for the ship-management services for the six new LNG ships, including  the provision of supervision services during the ship-construction period. MOL’s  (five) technical experts are already stationed in Shanghai to work together with  our Chinese partners for various preparations for this particular project that  are required to ensure the construction of quality LNG ships in a safe manner.

Our  good partnership with the Chinese partners will not only remain unchanged but  also will be further strengthened for our mutual benefit to overcome any  difficulties that may arise in the future. MOL is fully committed to assist the  Chinese partners to make this ambitious project a success.

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