Chinese acrylics producer Zhejiang Satellite Petrochemical (STL) has no intention of owning the six very large ethane carriers (VLEC) it ordered last week from South Korea's biggest yards.
The company is trying to generate publicity from the orders to attract new shipowners to the CNY 5bn ($745m) project after the deal with its first partner, Delos Shipping, fell through.
At this moment, every big shipowner can talk to us if they have good qualifications and good financing
Li Yuehua
Financial reputation vital
"At this moment, every big shipowner can talk to us if they have good qualifications and good financing," said Li Yuehua, general manager of purchasing at STL. "The most important thing is that they have a good financial reputation with international banks."
Delos originally ordered six 93,000-cbm ships last July for long-term charters to STL, three from Hyundai Heavy Industries and three from Samsung Heavy Industries, for about $123m each. However, despite revival attempts, the deal collapsed due to financing problems.
STL was scheduled to sign new orders with SHI this week for three 98,000-cbm VLECs at its base in Jiaxing, near Shanghai. A week earlier, it inked a similar deal with HHI.
Li told TradeWinds a figure of $120m per ship is "roughly correct", but that SHI's price per unit is a few million higher than HHI's.
Preserving delivery date
STL wants to keep the original order alive but to avoid a repeat of the process that saw the Delos order, for somewhat smaller ships, fall through. So, the company has sought advice from financial and legal sources, but has no plans to build its own shipping department to take delivery of the vessels in 2020 and 2021.
"Our plan is to be a charterer, not a shipowner," Li said. "To keep the delivery date, we took the order under our own name."
STL would be willing to sell the ships pending delivery, or to sign the newbuilding contracts over to a new owner.
Shenzhen-listed STL went through a shortlist of suitable partners before selecting Delos last year, and with the technical help of Hong Kong-based Fleet Management will review its potential partners again.
"We will begin to talk to potential shipowners following the contract signing ceremony," she said. "We have already talked to many before, but that was when we were the charterer. Now we are the owner."
Hungry for more
Although options for additional vessels were originally thought to be part of the orders, STL’s newbuilding contracts with HHI and SHI only involve the six firm ships. However, the company is understood to have an appetite for more.
“STL needs up to 12 VLECs. There is a high possibility that it may look to Chinese shipyards to build the other six vessels,” one shipbuilding source said.
China State Shipbuilding Co-controlled Jiangnan Shipyard, Hudong-Zhonghua Shipbuilding and China Shipbuilding Industry Co's Dalian Shipbuilding Industry Co (DSIC) are said to be the only shipyards able to build VLECs. Jiangnan and Hudong-Zhonghua are offering membrane-type vessels, while DSIC is tendering Type C tank ships.
DSIC recently delivered its first VLEC newbuilding — the 85,000-cbm Marlin — to Ineos Trading & Shipping. The order was placed by an affiliate of Jacques de Chateauvieux's Jaccar Holdings and will be operated by its Evergas subsidiary.
Irene Ang contributed to this story
