China’s Oriental Energy is poised to splash up to $304m at the country's state-owned Jiangnan Shipyard on up to four VLGC newbuildings, according to industry sources.
The outfit is eyeing two orders for firm 93,000-cbm ships for delivery in 2023, with options for a further two vessels, the sources said.
Oriental Energy, which is also known as Donghua Energy, currently owns two Jiangnan-built VLGCs — the 84,000-cbm Keegan No 1 and Keegan No 2 (both built 2020).
The ships were ordered in early 2018 for about $68m apiece.
An Oriental Energy official confirmed the order plans, adding that the newbuilding contract would be signed soon.
Sources said Oriental Energy is paying between $75m and $76m each for the LPG-fuelled gas carriers.
“These newbuildings are similar to the ones that Petredec ordered a few months ago,” a newbuilding player said.
“They are Jiangnan’s new Panda Class 93,000-cbm design that features the shipbuilder's patented Brilliance Technology, which aims to improve hull efficiency and lower consumption.”
Listed on the Shenzhen Stock Exchange, Oriental Energy is said to be China's largest LPG importer company.
The Nanjing-headquartered outfit is said to import some 10m tonnes of LPG annually. About 5m tonnes of LPG is for its own three propane dehydrogenation (PDH) plants in Zhejiang and Jiangsu province. It ships LPG from the Middle East and US to China.
Sister company
“Oriental Energy is also a trader and it imports around 5m tonnes of LPG for third parties,” a shipping player said. “It has a sister company called Matheson Energy that is carrying out the shipping and trading activities.”
The shipping player said Oriental Energy is ordering the newbuildings on the back of a fourth PDH plant it is building at Maoming, in Guangdong province.
It is investing CNY 40bn ($6.2bn) on the new plant, which will produce polypropylene, polyethylene, as well as hydrogen. It is scheduled to start up next year.
“Oriental Energy is both cargo owner and trader and it requires quite a lot of ships,” he said.
The Chinese company is said to have a fleet of more than 10 VLGCs that includes the two owned vessels. “The rest are long-term chartered vessels of between five to 10 years,” the shipping player said. It charters the gas carriers from various shipowners including Pacific Gas Shipping and Kumiai Senpaku.
Meanwhile, Oriental Energy is considering an initial public offering in Asia for its trading and logistics arm, Matheson Energy.
It was previously reported to have had discussions with SGX.
Other locations, including Hong Kong and Shenzhen, are also being considered for the IPO.
