EPS, Zhejiang Satellite Petrochemical pen deal for 4 dual-fuel VLECs

charter party contract
Image courtesy: EPS

Eastern Pacific Shipping (EPS) has won a bid to purchase, build, and operate four 98,000 cubic meter VLECs for China-based Zhejiang Satellite Petrochemical (STL).

Image courtesy: EPS

The vessels will be carrying ethane from the US Gulf Coast to Shenzhen-listed STL’s plant in Lianyungang, China.

Under the novation contract with STL, EPS will charter the VLECs for 15 years.

All four VLECs will feature dual-fuel ethane propulsion which will reduce greenhouse gas emissions when compared to conventional marine fuels.

 “Both companies share a vision of being the green and technology-driven leaders in our respective industries. This made the negotiations and subsequent agreement an enjoyable and seamless process,” EPS CEO Cyril Ducau said.

“For EPS, the addition of these four vessels complement our existing, and growing, mid and large gas carrier fleet. This deal also serves as an example of our commitment to using alternative marine fuels as transitional fuels towards decarbonisation and the preservation of the environment for future generations.”

The VLECs will be built at South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries and are scheduled for delivery in the first half of 2022.  

STL signed the shipbuilding contracts for the four VLECs worth a total of $441 million in August 2020.

A total of six newbuilding vessels are required to support the anticipated growth in the production output in the second stage of development of STL’s new ethane cracking facility in Lianyungang.

STL said in a regulatory filing that 2 more vessels have been chartered from Tianjin Southwest Shipping Co., and that it was looking for prospective buyers for the ships who would lease back the vessels to the company again.

STL has entered into a purchase deal with MISC Berhad, a Malaysia-based provider of energy-related maritime solutions and services, for six 98,000 cbm VLEC newbuilds under construction at HHI and SHI

Under the deal, MISC bought the ships for around $726 million and charter them to STL for a firm period of fifteen years. 

All six vessels, ordered in 2019, are slated for delivery in 2020.

According to STL, these ships are going to be the largest ethane transportation ships in the world.