March 24, 2020

Sanctioned Petrochemical Traders Manage Chinese Energy Conglomerate’s Fleet

By Edmund Xu and Samuel Rubenfeld

Photo: Junzheng Group


Subsidiaries of a China-based energy conglomerate that last year made the largest acquisition of a fleet of state-owned tanker vessels own companies that were recently sanctioned for their roles in acquiring Iranian petrochemicals.

Aoxing Ship Management Shanghai Ltd and Sea Charming Shipping Company Limited, sanctioned Wednesday by the U.S. State Department, are both wholly owned subsidiaries of China-based energy conglomerate Inner Mongolia Junzheng Energy & Chemical Group Co., Ltd., according to corporate records. The sanctioned firms are part of the shipping unit that Junzheng Group purchased last year from state-owned chemical firm Sinochem International Corporation.

The operations, including around 80 vessels, were valued at about USD 550 million, The Wall Street Journal reported at the time of the purchase, citing people familiar with the matter. Shipping operators and state companies have sold some vessels to private owners, but selling an entire fleet is rare, the report said. Sinochem put them up for sale in late 2017, after the conglomerate’s chairman sought to exit “scattered resource allocations,” WSJ reported. 

Junzheng Group, which reported CNY 8.47 billion in revenue for 2018, said last week its holding company would invest CNY 1.1 billion in a pharmaceutical firm, Reuters reported, citing a corporate disclosure. As of the time of this writing, neither Junzheng Group nor the Chinese foreign ministry has commented on the sanctions. China has historically opposed unilateral U.S. sanctions on the country’s trade with Iran.

Junzheng Shipping controls nearly 80 vessels and is China’s largest owner of liquid chemical tankers, according to a securities disclosure citing information from March 2019. All of Junzheng Shipping’s vessels are managed by Aoxing Ship Management, the disclosure shows. International Maritime Organization records indicate that Aoxing Ship Management manages dozens of the vessels. Zhang Jie, the vice general manager of the Junzheng parent company, is also a supervisor at Aoxing Ship Management, according to corporate records.

One of the vessels managed by Aoxing Ship Management is the Hong Kong-flagged chemical tanker, Sea Charming. Sea Charming’s registered owner is Sea Charming Shipping. The Marshall Islands registry on Wednesday annulled Sea Charming Shipping’s registration, records show.

The Sea Charming tanker has traveled between Thailand, Singapore, India, Saudi Arabia and the United Arab Emirates in the past few months, location data for the vessel shows. Unlike some vessels that have been implicated for Iran-related sanctions evasion activity, the Sea Charming does not appear to have recently shut off its location transponder for longer than a day while in the Persian Gulf.