The subsidiaries of two Chinese shipping groups, China Merchants Enegy Shipping (CMES) and Sinotrans & CSC Group, have come together to establish a VLCC joint venture valued at $1.11bn.

CMES will own 51% of the joint venture by providing $565.94m worth of assets including nine operational VLCCs and 10 VLCC newbuild contracts, an unspecified equity stake in its subsidiary Haihong Shipping, and some cash.

Sinotrans & CSC will invest $543.78m in cash to own the remaining 49% stake in the joint venture.

The new joint venture will also seek to acquire secondhand crude tankers or order newbuildings with an aim to become a globally competitive tanker shipping group, according to a stock exchange filing by CMES on Tuesday.

In addition, the joint venture will serve to meet China’s rising demand for oil imports.

The deal is expected to be completed before 30 September 2014.