China’s Wanhua Chemical Group has returned to domestic shipbuilder Jiangnan Shipyard to double down on very large ethane carrier newbuildings.
Shipbuilding sources said the polyurethane producer has doubled the number of VLECs it has on order at the state-owned shipyard to six. Its earlier three 99,000-cbm ships were ordered last year.
Wanhua Chemical’s latest batch was said to have been ordered “some time ago”, but the deal went unreported.
“It was a domestic order, and the two companies kept the deal under wraps,” said one shipbuilding source.
Officials at Jiangnan declined to comment on the shipyard’s newbuilding activities, citing contract confidentiality. Wanhua Chemical was not contactable.
The cost of Wanhua Chemical’s latest vessels was not disclosed, but one shipping source said Jiangnan is seeking about $160m for the ship type.
If correct, it would mean Wanhua Chemical is paying 27% more for its latest carriers. The company’s earlier vessels were reported to cost about $128m apiece.
Sources said Jiangnan is scheduled to deliver three newbuildings in 2024 and the other three in 2026.
Multiple gas sources said Wanhua Chemical will be novating three of the newbuildings to Middle East shipowner Adnoc Logistics & Services.
Adnoc L&S and Wanhua Chemical established a joint company, AW Shipping, in 2020 to strengthen the collaboration between Adnoc and Chinese companies and bilateral relations between China and the United Arab Emirates.
Shortly after launching AW Shipping, the venture ordered three LPG dual-fuelled VLGC newbuildings at Jiangnan. It added two more ships the following year.
Jiangnan delivered four of the 86,000-cbm VLGCs last year. The fifth vessel — the Baynounahin — was handed over in February. The VLGCs are transporting LPG from Abu Dhabi to China.
Global leader
Wanhua Chemical and Abu Dhabi National Oil have entered into a 10-year LPG supply contract worth up to $12bn.
Listed on the Shanghai bourse in 2001, Wanhua Chemical is a global leader in polyurethane and petrochemicals.
It is expanding the capacity of its polycarbonate plant in Yantai in Shandong province by 140,000 tonnes per year to 340,000 tonnes per year.
The chemical company expects its planned No 2 cracker and derivative plants to start up in October 2024. The cracker will take ethane and naphtha as feedstocks, which can create synergy with Wanhua’s existing propane-based No 1 cracker.
