State-controlled Wanhua Chemical Group is in talks with Chinese shipbuilders about constructing a series of VLGC newbuildings.
Brokers said the company is seeking five or six VLGCs that it requires to transport LPG from Abu Dhabi.
The exact size of the newbuildings and the delivery dates required have still to be revealed, along with details of whether the eventual owning party for the ships wants to wants to use LPG fuelling.
10-year deal
In November last year, Shanghai-listed Wanhua Chemical signed a 10-year contract with Abu Dhabi National Oil Co (Adnoc) for the supply of one million tonnes per annum of LPG.
The two outfits extended their tie-up in February when the Middle East gas producer’s subsidiary, Adnoc Logistics & Services, signed an MOU with Wanhua Chemical to form a joint venture that will own and operate the vessels needed to transport the LPG.
Those following the newbuilding business stress that it is Wanhua Chemical making the current enquiries on VLGCs, although Adnoc's name is frequently being associated with the enquiry.
Adnoc has recently indicated it intends to add another 25 ships to its fleet within the next five years.
The company has said priority will be given to crude oil tankers — a type that it currently does not own — along with gas carriers and bulkers.
The state-controlled outfit did not respond to requests for comment on the VLGC newbuilding project.
Wanhua Chemical is listed on the Shanghai Stock Exchange and is the largest user of LPG in China.
It uses LPG as the main feedstock for its petrochemical units and anticipates a consumption demand of up to six mtpa projected by 2021.
Wanhua Chemical also owns the world largest LPG underground storage with total capacity of 2.4 million cubic metres and has two dedicated VLGC berths.
A spokeswoman for Wanhua Chemical did not respond to questions on the VLGC requirement.
