Wanhua Chemical Orders 3 More VLECs from Jiangnan Shipyard

It is reported that Wanhua Chemical recently returned to China State Shipbuilding Corporation Jiangnan Shipyard to order three more very large ethane carriers (VLEC), bringing the number of VLEC orders at Jiangnan Shipyard to six. It is reported that the latest three 100,000 cubic meter VLECs were ordered by AW Shipping. The order was signed and took effect on October 23, and the delivery times are scheduled for July, September and December 2027 respectively; the other three 99,000 cubic meter VLECs ordered in 2022, the cost of a single ship is US$128 million and is expected to be delivered in 2024.

According to sources, the cost of these new ships is approximately US$160 million each, and the total transaction value is approximately US$480 million (approximately RMB 3.423 billion). This unit price is 25% higher than the price of US$128 million each for three 99,000 cubic meter VLEC ships ordered by Wanhua Chemical early last year.

In 2020, AW Shipping successively ordered five 86,000 cubic meter very large liquefied gas carriers (VLGC) from Jiangnan Shipyard. The first three ships were signed and took effect in July 2020, and the remaining two ships took effect around November of the same year. All have been completed and delivered.

Wanhua Chemical officially entered the shipping industry in February 2022. For the first time as a shipowner, it ordered three 99,000 cubic meter VLECs at Jiangnan Shipyard. The new ships will be delivered in 2024. The 99,000 cubic meter VLEC belongs to Jiangnan's "Panda" series and serves the long-distance transportation of liquefied ethane. It has a total design length of 230 meters, a molded width of 36.6 meters, and a molded depth of 22.5 meters. It is equipped with four "BrilliancE" B-type cargo tanks and two C-type deck tanks owned by Jiangnan Shipyard with independent intellectual property rights. The maximum tank capacity is 99,000 cubic meters. It is the first VLEC in the world to use B-type tanks and has the largest tank capacity.

The construction cost of VLEC is very high, about US$120 million per ship, and requires very professional shipping companies for transportation and management. At present, the corresponding slipways of shipbuilding companies such as Hyundai Heavy Industries, Samsung Heavy Industries, and Jiangnan Shipyard in the world that can build VLECs have been occupied by LNG ship orders. In the next few years, it will not be easy to add enough VLECs.