Teekay evaluates US/Chinese tanker company sanctions

Oct 04 2019


Teekay Corp has postponed an investor and analyst meeting, which was scheduled to take place in New York City on 2nd October, 2019.

This was due to concerns over Teekay LNG’s joint venture with the COSCO Group since the US announced sanctions against several Chinese shipping companies, including COSCO Dalian.

On 25th September, 2019, the US Government, by an Executive Office of Foreign Assets Control (OFAC) order, imposed sanctions on two subsidiaries of Chinese state-owned shipping and logistics company COSCO, including COSCO Shipping Tanker (Dalian), for allegedly trading oil with Iran with their owned vessels.

COSCO Dalian is a direct 50% shareholder in China LNG Shipping (Holdings) Limited (CLNG). CLNG was not listed on the recent OFAC order or otherwise directly implicated in any sanctioned activity, but by virtue of being 50%-owned by COSCO Dalian, CLNG qualifies as a ‘Blocked Person’ under OFAC rules, Teekay explained.

In turn, CLNG owns a 50% interest in Teekay LNG’s Yamal LNG joint venture.

Teekay stressed that it had not traded and will not trade with Iran and will not act in contravention of any trading sanctions.

With respect to Teekay Tankers’ business, given the significant size of COSCO Dalian’s tanker fleet, the COSCO sanctions are having a pronounced positive impact on spot tanker rates, the company said (see markets report).

 



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