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Japan’s shipping giant Mitsui O.S.K. Lines (MOL) has struck a charter deal with India’s state-owned Oil and Natural Gas Company (ONGC), which enables South Korea’s Samsung Heavy Industries (SHI) to build two very large ethane carriers (VLECs).
MOL and ONGC have established two joint ventures, Bharat Ethane One IFSC Private and Bharat Ethane Two IFSC Private, which signed a 15-year charter contract with India’s state-owned oil and gas player for two newbuilding VLECs.
The 100,000-cubic-meter very large ethane carriers will be equipped with dual-fuel main engines capable of burning ethane as fuel. These vessels are scheduled for construction at Samsung Heavy Industries Geoje Shipyard.
The VLECs’ delivery is slated for late 2028 or later, after which the vessels will be engaged in transporting liquefied ethane from the U.S. to India to be supplied as feedstock to the petrochemical plant operated by ONGC’s subsidiary, ONGC Petro Additions, in Dahej, Gujarat.
This contract expands MOL’s VLEC fleet to 16 vessels, said to be the largest such fleet in the world. After launching its ethane transport business in 2016 as the world’s first VLEC operator, the Japanese firm has steadily built a strong track record in liquefied ethane transport and established itself as a leader in VLEC management and operations.
The company’s experience with liquefied gas carriers, including VLECs, along with its operational expertise in the Indian Special Economic Zone, where these joint ventures are based, was perceived as having led to the signing of this long-term charter agreement.
“MOL Group is advancing a transformation of its business portfolio by increasing the share of stable earnings businesses to secure profitability even during shipping downturns. Expanding our LNG and VLEC fleets-the world’s largest- as well as our long-term time charter contracts is part of this initiative,” highlighted the shipping player.
“Building on its accumulated experience and expertise, the group aims to take a significant step forward as a global social infrastructure company. From the blue ocean, it will sustain people’s lives, ensure a prosperous future, and deliver new value to all stakeholders.”
The arrangement with ONGC comes shortly after MOL inked a charter deal for a liquefied natural gas (LNG) carrier (LNGC) with India’s Gail.