China’s Tianjin Southwest Maritime (TSM) has joined the VLEC sector by signing up for two 99,000-cbm newbuildings at Jiangnan Shipyard.
A shipbuilding player familiar with the deal confirmed the order, saying Jiangnan is scheduled to deliver the ships in the final quarter of 2022. The deal does not include any options.
News of TSM's order was first reported in TradeWinds last month.
TSM has booked the duo on the back of a 15-year long-term charter contract with Chinese acrylic acid and acrylates manufacturer Zhejiang Satellite Petrochemical (STL). The charter deal was reported to be worth $500m.
STL is chartering TSM’s VLEC newbuildings for the company’s second phase of an ethane cracker and terminal that is under construction at Lianyungang in Jiangsu province.
The acrylic producer needs six to eight VLECs. It is ordering the remaining vessels itself. It has signed a letter of intent with South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries for two 98,000-cbm VLEC newbuildings each, with options for an additional ship at each yard.
TSM is said to have paid less than $110m apiece for the VLEC newbuildings, which will have two deck tanks of 500-cbm each.
Jiangnan orders
TSM’s newbuilding order is the second VLEC contract that Jiangnan has secured. Pacific Gas — the gas shipping arm of Shandong Shipping — ordered two vessels at the end of last year for delivery in early 2023. The contract helped Jiangnan to break into the VLEC arena.
“The VLECs that TSM ordered at Jiangnan are the same type that Pacific Gas booked at the shipyard,” said the shipbuilding player.
Jiangnan claims the 99,000-cbm VLECs it is building will be the world’s largest ethane carriers. They feature Jiangnan’s own “BrilliancE” Type B tanks. The Chinese shipbuilder has a tradition of giving its ship designs nicknames and has named the 99,000-cbm VLEC design Bluebonnet as it is the maximum size of vessel that can sail the Houston Ship Channel.
TSM is the shipping arm of Wideshine Enterprise, which is part of Wideshine Group.
The company specialises in gas and owns five Jiangnan-built VLGCs, one 22,000-cbm LPG carrier 11 vessels of less than 5,000 cbm.
It also owns five small tankers.
TSM also has five 86,000-cbm VLGC newbuildings under construction at Jiangnan for delivery next year and in 2022. It is also building one 9,500-cbm gas ship at Guangzhou Huangpu Shipyard for delivery next year.
Typhoon damage
Meanwhile, STL is scheduled to take delivery of six VLEC newbuildings — three each at SHI and HHI — between next month and the first quarter of 2021 to move cargoes for the first phase of the ethane cracker.
STL’s first VLEC newbuilding at HHI is slated for November delivery. But the 98,000-cbm ship may face some delivery delays as it was reported to have been damaged by Typhoon Maysak last week.
The vessel’s cargo tanks and engine room were said to be “badly damaged and flooded”. One shipbuilding player believes the VLEC's membrane containment system may have been damaged and it may take a few months to fix the ship.
