Japan’s Mitsui OSK Lines Ltd (MOL) has purchased a strategic stake in each of the six very large ethane carriers (VLEC) owned by a Singapore unit of Reliance Industries Ltd for an undisclosed amount.
The deal helps MOL, the world’s largest operator of LNG carriers, add six VLECs to its fleet by becoming the joint owner and operator of the six special purpose vehicles (SPVs), each owning a VLEC. Tokyo Stock Exchange-listed MOL is currently the operator and manager of the six ethane carriers that were ordered by Reliance at South Korea’s Samsung Heavy Industries Co Ltd in July 2014 for a combined $720 million and delivered in 2016. Aside MOL, an unnamed strategic minority investor has also invested in the six ethane carriers, Reliance said in a statement, without giving details.
A hybrid carrier
The VLECs — a hybrid of LNG carrier and LPG carrier — ship ethane from the US to India, for use in the petrochemical complex owned and operated by Reliance at Jamnagar in Gujarat. Ethane is primarily used as a petrochemical feedstock, to produce ethylene by steam cracking.
These are the first and largest vessels ever built for transportation of ethane at an industrial scale.
“Given MOL is currently the operator of all the six VLECs, investment by MOL will deepen our relationship with them and ensure continued safe and efficient operations of VLECs as they move beyond the current operator role to joint owner and operator role in the SPVs,” said PMS Prasad, executive director, RIL.
“This investment would enable MOL to add six unique VLECs, which we have been operating for some time now, as owners to its existing fleet of over 850 vessels.
“MOL has detailed knowledge about these assets having supervised the construction and delivery of the six VLECs and subsequently operating them since their delivery. We look forward to use this strategic opportunity to be a joint owner and to significantly strengthen our existing relationship with Reliance,” said Takeshi Hashimoto, member of the board and executive vice-president, MOL.
Source: The Hindu Business Line
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