China’s Pacific Gas is stepping up its presence in the very large ethane carrier (VLEC) segment.
The company aims to triple the number VLECs it controls by ordering up to four ethane dual-fuelled newbuildings at a domestic shipyard.
Shipbuilding sources said the Hong Kong-registered, Shanghai-based company has struck a newbuilding deal with Jiangnan Shipyard for two firm VLECs. The contract has an option for two additional ships.
Officials at Jiangnan declined to comment on the shipyard’s newbuilding activities, citing contract confidentiality. Pacific Gas did not reply to emails seeking confirmation.
Sources said Pacific Gas has ordered the firm 99,000-cbm ethane carriers against long-term charters of at least 10 years to UK chemicals giant Ineos. The charter rate was not disclosed.
TradeWinds learned that Ineos was meant to charter the two VLECs newbuildings from Jaccar Holdings-controlled Evergas. But the latter did not manage to get financing from Chinese leasing companies. As a result, Pacific Gas was brought into the deal.
Sources said Pacific Gas is paying in excess of $130m each for the 99,000-cbm ethane ships, which will be fitted with IMO type-B tanks. Jiangnan is scheduled to deliver the two firm newbuildings in 2025.
Pacific Gas is believed to be the third shipping company to have ordered VLECs at Jiangnan this year. The other two were Chinese polyurethane producer Wanhua Chemical Group and Guangzhou-based Tianjin Southwest Maritime. Each ordered two newbuildings to be delivered in 2025.
Pacific Gas is a subsidiary of Shandong Energy, a unit under China’s third-largest shipping company Shandong Shipping.
Pacific Gas specialises in VLGC shipping, supply chain management and storage-facilities business. The company owns 15 gas carriers — eight VLGCs, five ethylene carriers of between 17,000 cbm and 22,000 cbm and two VLECs.
The VLECs — the Pacific Ineos Grenadier (built 2022) and Pacific Ineos Belstaff (built 2021) — were also built by Jiangnan. The duo was ordered in 2019 at a reported price of about $120m per ship. The vessels are also employed by Ineos.
The Pacific Ineos Belstaff was the world’s first dual-fuelled IMO type-B tank VLEC.
The gas carrier is compliant with IMO Tier III NOx regulations and meets the latest version of the 2016 International Code of the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk — also referred to as the IGC Code.
Jiangnan had specially designed the 12-metre draught, 99,000-cbm VLEC for the long-haul transportation of ethane, with the ship being able to navigate the Houston Ship Channel in Texas. The VLEC is also capable of carrying other liquefied gas cargoes, such as ethylene, LPG and gases, that require chilling down to -104C.
Ineos started shipping America’s competitively priced ethane to Europe in 2015. The company was also the first to ship US shale gas ethane to China in 2019, deploying Evergas’ 83,700-cbm VLEC JS Ineos Marlin (built 2019).
