Chinese chemical producer Zhejiang Satellite Petrochemical (STL) has confirmed it plans to start active talks with shipowners interested in acquiring its six very large ethane carriers (VLECs) under construction.
In an exchange filing, the Shenzhen-listed company said its board would be seeking authorisation from shareholders to carry out such negotiation in an extraordinary meeting on 14 July.
“We are actively looking for interested shipowners to take over the newbuilding contracts for $717m and period charter the vessels back to us,” the filing said. “We would like to begin negotiation on charter and novation terms.”
“We will sell the ships to the new owners for the same prices we bought them.”
The remarks have come as the first VLECs are due to be delivered from two South Korean yards later this year.
On the back of long-term charters from STL, Delos Shipping in July 2018 booked three 93,000-cbm ethane carriers at Samsung Heavy Industries for $364m and another three at Hyundai Heavy Industries for $353m.
Financing issues
But the US private equity firm’s deals fell through due to financing issues and STL was forced to acquire the newbuildings in early 2019.
At that time, Li Yuehua, general manager of purchasing at STL, told TradeWinds that the company had no intention of operating the vessels itself and would partner with interested shipowners.
By the end of this year, the company is aiming to complete the construction of a 2.5 million tonnes per year ethane-cracking petrochemical plant in Lianyungang.
Satellite Petrochemical USA, an STL subsidiary, has established a joint venture with Energy Transfer Partners (ETP) to build an ethane export terminal on the US Gulf Coast.
ETP has also agreed to supply 150,000 barrels per day of ethane to STL from the fourth quarter of this year, which are expected to be carried by those VLECs.
“We are hoping to find shipowners for those newbuildings so they can provide better service in shipping feedstocks to Lianyungang,” STL said.
