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STL is proceeding with the third phase of its giant petrochemical complex in Lianyungang, Jiangsu province.
The firm needs to secure shipping capacity to import ethane from Energy Transfer’s Nederland terminal in Texas and Enterprise’s Morgan’s Point ethylene export terminal in Texas, the sources said.
More than 50 percent capacity increase
This third phase expansion of STL’s complex adopts ultra large ethane carriers (ULEC) in order to optimize shipping costs.
The current very large ethane carriers which ship ethane to the facility in Lianyungang have a capacity of about 98,000 cbm.
STL charters these vessels from shipowners such as Singapore’s Eastern Pacific Shipping and Malaysia’s MISC, a unit of Petronas.
The new vessels will have a capacity of about 150,000 cbm, an increase of more than 50 percent compared to the current largest ethane carriers, the sources said.
Final deals expected to be signed by end of this month
The first VLEC vessels that were ordered to serve STL in 2020 were each priced at about $115 million, while these new vessels are worth about $200 million, according to the sources.
The sources said that STL secured six slots at CSSC’s Jiangnan with deliveries of the vessels scheduled in 2027.
Jiangnan has “attractive slots” to build these ships as it did not secure any new orders for large LNG carriers since last year, the sources said.
Idan Ofer-led EPS will charter these six vessels under a deal with STL, they said.
On the other hand, STL secured four slots at HD Hyundai Heavy for ultra large ethane carriers with delivery slots scheduled for 2027 as well.
MISC, China’s Pacific Gas, and Stonepeak’s Seapeak are competing to win the 2+2 charter deal with STL for these vessels, the sources said.
They said that letters of intent for the construction of the vessels at both yards have already been signed.
The final shipbuilding deals are expected to be executed by the end of this month.
“LNG cargo ready”
The sources said that the new vessels will feature MAN ME-GI propulsion, GTT’s Mark III containment system, and will use ethane as fuel.
Besides shipping ethane, these are “LNG cargo ready” ships, meaning they can be retrofitted to serve as LNG carriers, FSRUs, or FSUs without upgrading the vessel’s tank, pumps, and the main engine.
According to the website of French LNG containment giant GTT, ULEC is a concept introduced by the company in 2018.
American Ethane (AEC) was the first to consider this type of vessel, but the project did not materialize.
GTT developed a 150,000-cbm multi-gases carrier able to carry either ethane, ethylene, or LNG.
The vessel has been modified to carry ethane as a prime cargo and LNG as a “fall-back”, in order to give confidence to asset buyer through flexibility of trade, it said.
If the vessel carriers LNG cargo, it can also use LNG as fuel.
The vessel is 274 meters long, 42 meters wide, and has a draft of 11.9 metes.
It has been developed with the objective to access all existing ethane US terminals, Morgan’s Point, Netherlands, and Marcus Hook, in addition to major existing LNG terminals, according to GTT.
