American shale spurs high demand for VLEC and LNG carriers

Shipyard
Source: DollarPhotoClub

Much is happening in the energy carrier market, with new companies entering the very large ethane carriers (VLEC) sector and orders being placed for LNG ships.

There is a lot of investment happening in preparation for the boom in LNG trading expected to start with the first American export terminals coming online in early 2015. Today, the Trade Winds News reported that Samsung Heavy Industries (SHI), has landed an order for three new LNG carriers worth $620m.

The Korean company did not disclose who the buyer is, but Trade Winds speculates that it might be Japan’s Mitsui & Co, which had announced that it intended to order a further three 174,000-cbm ships for the Cameron LNG project in the U.S. It is understood that SHI was under consideration for the project. The ships are to be dual-fuel, diesel-electric (DFDE) LNG newbuildings

The new carriers built by SHI – which are to be ready in 2018, to transport U.S. shale gas – are eco-carriers with dual-fuel engines to increase efficiency and reduce emissions, Samsung said.

Meanwhile, the Finnish manufacturer of marine equipment Wartsila, has managed to break into the very large ethane carriers (VLEC) sector, by signing a deal Samsung Heavy Industries.

Wartsila equipment will be featured in six 87,000-cbm VLECs which Samsung Heavy Industries are building for India’s Reliance Industries. The ships are to be delivered from 2016 onwards.

Wartsila will provide the process and arrangement engineering, the deck tank and all equipment related to the cargo handling. It will also construct a purpose-built re-liquefaction plant to handle the C-ethane from the American shale gas.

Timo Koponen, vice president of flow and gas solutions for Wartslia, said: “This is a valuable order and one that again emphasises our competences and experience in gas handling systems.

“Our technology and know-how in this field positions us to offer the most appropriate solutions for VLECs, which is an application rapidly expanding.”

With the ongoing shale boom in America, VLECs have become a lucrative market, with several large players including: Germany’s Hartmann Schiffahrts, Jaccar Holdings and HB Hunte Engineering, eager to capitalise on the opportunity. The three companies signed a joint letter of intent for five VLECs with a total value of $650m, in September.

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