MISC enters global ethane market with six-vessel purchase

MISC Berhad, a Malaysia-based provider of energy-related maritime solutions and services, has entered into memoranda of agreement (MOA) with six subsidiaries of China-based Zhejiang Satellite Petrochemical for the purchase of six 98,000 cbm very large ethane carrier (VLEC) newbuilds.

Image by MISC

Concurrently, MISC, through its vessel-owning entity, Portovenere and Lerici (Singapore) (PLS) has entered into time charter parties with Zhejiang Satellite Petrochemical (STL) for the six VLECs for operations in international waters.

As informed, MISC will buy the ships for around $726 million and charter them to STL through PLS for a firm period of fifteen years. The charters for the VLECS are expected to commence in the fourth quarter of 2020.

South Korean shipyards, Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI), are each constructing three vessels.

“A new chapter is in the making as we make our entry into the global ethane market with these six VLECs and a new alliance in China. The acquisition of these six VLECs marks a milestone in MISC’s offerings for large scale ethane transport,” Yee Yang Chien, MISC’s President and CEO, commented.

“Adding to the strength and expansion of our existing fleets as well as diversifying our portfolios, we are now the proud owner of six VLECs – which are the largest vessels of its kind, aside from the existing seven VLECs in the world. As one of the only three owners of such vessels in the world, this new addition to our fleet would strengthen MISC’s competitive advantage in this segment.”

“Despite the current challenging market environment, MISC Group has been making notable strides; as part of our effort to diversify our portfolio, develop new solutions and enlarge our presence with the addition of new markets. The long-term charter parties are instrumental to the build up of our sustainable income stream,” he added.

“China and Malaysia have been having a very good relationship for quite a long time. Especially during the recent years, the cooperation between the two countries has been greatly increased,” Yang Weidong, Chairman and President of STL, pointed out.

“Today (15 July) by entering into this agreement, Satellite and MISC have just started a new venture, in which the two parties will build a global logistics supply chain for chemicals together. This supply chain is going to safeguard the world-leading ethylene cracker that is being built by Satellite. Together, the two companies will help accelerating the development of global chemical industry. I believe that our cooperation will be very successful and last long.”

As of 30 June 2020, MISC Group’s fleet consists of more than 100 owned and in-chartered vessels comprising LNG, petroleum and product vessels, fourteen floating production systems (FPS) as well as two LNG floating storage units (FSU). The fleet has a combined deadweight tonnage (dwt) capacity of more than 14 million tonnes.