Cosco Shipping Heavy Industry’s Dalian shipyard has terminated a newbuilding contract with Dalian Inteh Group for a 28,000 cu m LNG carrier due to payment delays.
Dalian Inteh Group, a chemical logistics company, signed a RMB560m ($83.4m) EPC contract with Shanghai Bestway Marine & Energy Technology in 2013 for the design and construction of the vessel, and Shanghai Bestway awarded the construction contract to Cosco Dalian.
The contract was the first and only LNG carrier order secured by Cosco Dalian.
According to Shanghai Bestway, the owner failed to make further payments following an initial payment of 10% of the EPC contract, while Shanghai Bestway has already paid 40% of the construction contract to Cosco Dalian.
Last year, Shanghai Bestway reported the risk of not being unable to receive payment from Dalian Inteh due to the owner’s financial issues.
Shanghai Bestway said the company will do its best to coordinate with Dalian Inteh and Cosco Dalian to continue the project, however, it will also reserve the right to take legal actions against Dalian Inteh.
The construction of the LNG carrier is near completion and the ship will be ready for delivery soon.
Shanghai Bestway is now in deep financial trouble with lawsuits against the company stacking up. The company’s controlling shareholder Liu Nan failed in three separate deals to dispose of his shares in the company.