Shipowners are preparing quotations for two very large ethane carrier (VLEC) newbuildings for chemical giant Ineos.
Industry sources following the gas sector said Ineos needs two vessels of around 90,000-cbm capacity. They said shipowners already working in the gas and ethane sector are proposing designs for vessels of about 85,000 cbm and 95,000 cbm.
Brokers said a VLEC newbuilding would probably cost $120m or more, depending on the technology selected.
Shale boom
It is unclear how Ineos, which controls one VLEC on the water and has another under construction, plans to deploy the ships.
A spokesman did not reply to TradeWinds’ request for comment and further details.
VLEC business is expected to take off as US production of ethane ramps up with the booming shale gas business.
But while ethane falls outside the scope of US-China trade wars, the friction between the two giants is putting the brakes on large term deals being finalised between the countries. Long-haul shipments would require VLECs.
Despite the lack of established trades, the first spot cargo of US ethane onboard a VLEC is being shipped to China.
The 83,757-cbm JS Ineos Marlin (built 2019) loaded an ethane cargo at Marcus Hook in Pennsylvania and Morgan’s Point in Texas, and is due to deliver it to SP Chemicals’ new gas cracker facility at Taixing in Jiangsu province.
It followed a smaller shipment that took the same route last month onboard the 27,500-cbm multigas carrier JS Ineos Inspiration (built 2016).
Both vessels are owned by Jaccar Holdings-controlled Evergas and are on long-term charter to Ineos Trading & Shipping.
Ineos has a long-term supply contract with SP Chemicals on ethane.
Only one long-term ethane trade is in operation from the US today, with cargoes being shipped to India.
This is served by six 87,000-cbm VLECs, which are owned by Japanese shipowner MOL and chartered to India’s Reliance Industries.
These vessels ship around 1.5 million tonnes per annum of ethane from Enterprise Products Partners’ export facility in the US to Reliance’s Jamnagar refinery in Gujarat.
Several other VLEC newbuilding projects have been started at shipyards but have failed to materialise or have collapsed.
