A raft of up to 40 very large ethane carriers could be ordered in the coming 12 months as developers try to move projects forward in a climate where the US-China trade disputes are proving a difficult last hurdle.
ABS Global Gas Solutions director Adi Aggarwal, who was speaking at the Gastech meeting in Houston, listed four projects and the number of vessels they might require.
“The current market is really small but there is a potential for almost 40 ships to be ordered in the next year,” he said.
Aggarwal headlined his presentation “a new era for ethane carriers”.
He highlighted that this is a new industry sector with the US and Norway the only exporters of ethane.
In the last six years exports have risen from zero to 8 million tonnes per annum with the first big shipments being those for Reliance Industries that is importing US ethane, he explained.
But Aggarwal said there are now new projects on the horizon looking at exporting seven to 10 mtpa.
These envisage shipping ethane from the US to China and a new cracker being built in Belgium.
Cargo flexibility
The ABS director explained that developers are now looking at much larger vessels or ultra large ethane carriers (ULECs) of up to 150,000-cbm to capture economies of scale.
But as sizes increase, this may limit the ships' ability to trade LPG, as an alternative back-up to their utilisation, since the vessels may prove too large for some terminals.
Aggarwal went on to highlight the different technical considerations that designers have to take into account if they want to make their large ethane carriers capable of carrying LNG.
He said developers also need to be aware of compliance factors if they are operating vessels that are loading cargoes in the US.
"The real question is about cargo flexibility," he said. VLEC owners and operators do need a second trade, "a plan B" or it is a challenge to get the project financed.
He explained that ABS, working with membrane designer GTT, is launching an LNG cargo ready notation which focuses on verifying which aspects of the VLEC or ultra large ethane carrier (ULEC) complies with an LNG carrier.
We do see [ethane] volumes growing , and the transportation infrastructure building up and becoming more mature.
"This is just the beginning," Aggarwal said.
"We hope some of the projects waiting for final projects that have been waiting for the final decisions to be made will come online soon and we can see some new projects and some bigger vessels and some dedicated ULECs and VLECs for the ethane trade in the near future."
