Zhejiang Satellite Petrochemical moves into shipowning with orders for six VLECs
Chinese company Zhejiang Satellite Petrochemical has officially signed shipbuilding contracts with South Korean yards Hyundai Heavy Industries and Samsung Heavy Industries for the construction of a total of six 98,000 cu m VLECs.
Satellite Petrochemical has placed orders for three vessels at each yard, with a total investment of around RMB5bn ($744m). Deliveries are scheduled to start from the first quarter of 2021.
The new orders also marks Satellite Petrochemical’s entry into shipowning. The company initially planned to charter the VLECs from US shipping Delos Shipping, which ordered six 93,000 cu m VLECs at the two Korean yards last year. However, the orders were terminated in February as Delos was unable to make payments according to contract terms.
Satellite Petrochemical is the largest acrylic acid producer in China. The new vessels will be used to import ethane from Texas to the company’s petrochemical terminal in Lianyungang.
Last year, Satellite Petrochemical set up a joint venture with US petrochemical company Energy Transfer Partners to promote the import and export of ethane for the company’s hydrocarbon comprehensive project in Lianyungang.
The US is now the world’s only major exporter of waterborne ethane, exporting its first waterborne ethane in 2016. It has seen growing demand for the cargo from Chinese petrochemical plants in the past a couple of years.
Last year, China’s Nanshan Group signed a 20-year ethane import contract with Amercian Ethane Company, which signed with China LNG Shipping to collaborate on ethane shipping and jointly order and manage VLEC newbuildings at Hudong-Zhonghua Shipbuilding. The newbuilding contract has not been finalised yet.
