US ethane exporter American Ethane Company (AEC) has signed a memorandum of understanding with China LNG Shipping (CLNG) to collaborate on ethane shipping from US to China.
The signing of the MOU follows AEC entering into a 20-year $26bn supply contract with China’s Nanshan Group last November to deliver ethane gas from a terminal on the Texas Gulf Coast to a new ethane plant in China to be built by the Nanshan Group.
Under the MOU, the two parties agree to jointly order and manage the VLEC newbuildings at CSSC-affiliated Hudong Zhonghua Shipbuilding. The details of the order have not yet been finalised.
American Ethane is developing the largest ethane export terminal on the Gulf Coast with an annual output of 10m metric tons per year of liquefied ethane gas (LEG). Construction of the terminal will be coordinated with downstream infrastructure in China and is expected to start in 2018 with completion by 2020.
CLNG was jointly established by China Merchants Group and China Cosco Shipping, and is the first Chinese LNG shipping company. It currently runs six LNG carriers in its own fleet and another nine LNG carriers under joint ventures.