Shandong Shipping — China’s third-largest shipping company — has made its debut in the very large ethane carrier (VLEC) segment, with gas carrier arm Pacific Gas signing up for two newbuildings at Jiangnan Shipyard.
Pacific Gas chief operating officer John Lu inked the deal at a China State Shipbuilding Co (CSSC) signing ceremony in Shanghai early this week.
State-owned Jiangnan will construct the 98,000-cbm ethane gas tankers for delivery in early 2023.
The price has not been disclosed but shipbuilding experts suggest the ships will cost about $120m each. The deal does not include options.
Industry sources said Pacific Gas has ordered the VLECs on the back of long-term charters with chemical giant Ineos.
US ethane to Belgium
Ineos needs the VLECs to move US ethane to its new petrochemical plant in the Belgian port of Antwerp, where it is investing $3.42bn in an ethane gas cracker and propane dehydrogenation unit.
It will be Europe’s first new cracker in two decades and is Ineos' largest investment so far.
Sources following the business said BW Gas, MOL and Navigator Gas were among the companies competing for the Ineos deal.
South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries also submitted bids for the project.
Shipbuilding players said the contract allows Jiangnan to break into the ethane sector — a segment it has been working on for some time.
The yard is said to be offering a type-B cargo tank solution.
Registered in Hong Kong, Pacific Gas specialises in VLGC shipping, supply chain management and storage-facilities business.
It has offices in Hong Kong, Shanghai, Singapore and Mumbai, and has plans to set up an office in Houston.
Pacific Gas owns a fleet of 14 gas carriers, which includes nine VLGCs, a pair of 17,000-cbm ethylene carriers and another three of 22,000 cbm each.
