China's Bank of Communications Financial Leasing and SPDB Financial Leasing have confirmed an order for very large ethane carriers (VLECs) chartered to Shandong Shipping's Pacific Gas.
According to Shandong, the vessels will be shipping ethane for chemicals giant Ineos under a long-term agreement.
“We adopt an asset light strategy to integrate multiple resources. We have managed to take advantage of lease financing and work with the shipbuilder and our end customer to benefit the parties involved,” the Chinese shipowner said.
TradeWinds first reported that the Chinese shipowner had ordered the 98,000-cbm pair at CSSC Jiangnan Shipyard in December.
BoComm Leasing and SPDB will own one vessel each.
The move is a debut in the VLEC sector for Shandong, China’s third-largest shipping company.
Pacific Gas chief operating officer John Lu inked the deal at a CSSC signing ceremony in Shanghai last month.
The price has not been disclosed but shipbuilding experts suggested the ships will cost about $120m each.
The deal does not include options.
Sources had tipped the ships to work for chemical giant Ineos, carrying US ethane to its new petrochemical plant in the Belgian port of Antwerp.
$3.42bn investments
It is investing $3.42bn in an ethane gas cracker and propane dehydrogenation unit there.
Several Chinese media expected the vessels to be delivered by the fourth quarter of 2021 based on Ineo’s commission plan. Officials at Jiangnan and Shandong Marine were not immediately available to comment outside of office hours.
Ineos has been contacted for further details.
Sources following the business said BW Gas, MOL and Navigator Gas were among the companies competing for the contract.
South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries also submitted bids for the project.
Pacific Gas has previously specialised in VLGCs.
It 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.
