China’s Tianjin Southwest Maritime (TSM) is continuing its VLGC spree by ordering more newbuildings.
Industry sources said the Guangzhou shipowner has returned to state-owned Chinese builder Jiangnan Shipyard after placing an order there less than a month ago.
It has commissioned three more LPG-fuelled, 86,000-cbm newbuildings, bringing its total tally at the Shanghai yard to five.
Three weeks ago, TSM signed a deal with the yard to build a similar ship, which was said to represent an option that it held at Jiangnan when it ordered its first vessel in January.
The Abu Dhabi connection
Officials at TSM were unavailable to comment, while Jiangnan declined to disclose its activities, citing contract confidentiality.
Gas players said the latest newbuildings are backed by long-term employment from leading Chinese polyurethane producer Wanhua Chemical Group. The rate and period of the charter deals were not disclosed.
TSM is believed to be paying between $73m and $74m each for the vessels, which will comply with the IMO’s Tier III emissions regulations and the latest International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk. Jiangnan is due to deliver the trio in 2022.
As for TSM’s earlier two vessels, they are scheduled to be delivered in the first and third quarters of 2021.
In July, Wanhua Chemical was reported to be in talks with Chinese shipbuilders about constructing a series of VLGC newbuildings. It was said to be seeking five or six vessels to transport LPG from Abu Dhabi.
Wanhua Chemical signed a 10-year contract with Abu Dhabi National Oil Co (Adnoc) last November to supply 1m tonnes per annum of LPG.
The two outfits extended their tie-up this year when subsidiary Adnoc Logistics & Services signed a memorandum of understanding with Wanhua Chemical to form a joint venture that will own and operate the vessels needed to transport the LPG.
“We understand Adnoc Logistics is not involved in the three [latest] VLGC newbuildings that are ordered at Jiangnan by TSM,” a shipbuilding source said.
Wanhua Chemical, which is listed on the Shanghai Stock Exchange, is the largest user of LPG in China. It uses LPG as the main feedstock for its petrochemical production, and it projects demand of up to 6 million tonnes per annum by 2021.
Wanhua Chemical also owns the world’s largest underground LPG storage, with capacity of 2.4m cubic metres, and it has two dedicated VLGC berths.
TSM’s latest contract at Jiangnan brings the total number of LPG-fuelled VLGC newbuildings on order to 10. Singapore’s Kumiai Navigation booked an 84,000-cbm VLGC at Kawasaki Heavy Industries, Belgium’s Exmar has two at Jiangnan and trading giant Trafigura signed up for two at Hyundai Heavy Industries last month.
TSM is the shipping arm of Wideshine Enterprises, which is part of Wideshine Group.
According to VesselsValue, TSM’s fleet is made up of seven tankers and 17 gas carriers: five VLGCs, 11 fully pressurised small gas carriers and a 22,000-cbm semi-refrigerated gas ship.
