Three shipbuilders are competing to scoop work to build two VLEC newbuildings, as owners seek prices against a charter requirement from petrochemicals giant Ineos.

South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries, and China’s Jiangnan Shipyard are said to be vying for two ethane-fuelled VLECs of around 98,000 to 99,000 cbm, plus two options.

Brokers suggested a VLEC newbuilding would probably cost around $120m or more, depending on the technology selected.

Those following the project said Jiangnan is offering a type-B cargo tank solution, with SHI proposing a membrane-type design and HHI putting forward designs for both options.

Shipping companies working on Ineos' VLEC business are understood to include BW Gas, MOL, Pacific Gas and Navigator Gas.

Discussions slowed

“Ineos' VLEC newbuildings are the only project that is actively taking place,” a shipbuilding source said. “Because of the ongoing trade war between the US and China, discussions on potential VLEC projects that involved the two countries have slowed down.”

Industry sources suggested a decision could be made in the next few weeks on the preferred owner and yard for the VLECs.

They believe the project should be concluded by the end of this year as Ineos needs the ships to transport cargoes from the fourth quarter of 2021.

Ineos wants to use the VLECs to move US ethane to its new petrochemical plant in the Belgian port of Antwerp.

The company is investing $3.42bn to construct an ethane gas cracker and propane dehydrogenation unit there. The petrochemical facility will be Europe’s first new cracker in two decades and is Ineos' largest investment so far.