Reliance, Mitsui OSK Lines sign shipping deal for ethane import project
26 December 2014
Reliance Industries Ltd (RIL) has entered into long-term shipping agreements with Mitsui OSK Lines Ltd (MOL) for transporting liquefied ethane from North America to India.
Under the agreement, MOL will manage and operate a dedicated liquefied ethane transportation fleet of very large ethane carriers (VLEC).
The transportation of ethane will be carried out by six VLEC's from North America to India. The VLEC's are being specifically built by Samsung Heavy Industries Co, Ltd and are expected to be delivered in the last quarter of 2016 and will enter into service thereafter.
The vessels are designed to cater to the latest safety and environmental regulations and will have superior design parameters, the two companies stated in a release.
MOL, one of the world's largest and reputed shipping companies, will supervise the construction of six very large ethane carriers (VLECs), ordered by Reliance. MOL will also operate and manage the vessels during the charter period for Reliance.
MOL said it expects significant businesses and stable long-term profits from the high growth shale revolution and that the strategic association with Reliance is in line with this direction.
VLECs, are a hybrid of LNG carrier and LPG carrier, and required the expertise in both the LNG carriers and LPG carriers. Considering MOL's rich experience for both type of carriers it is in better position to leverage on its existing capabilities to tap this new opportunity MOL will, in response to increasing demands for energy transportation, continue its effort to provide safe and stable sea transportation services based on high standard of safety transportation system, it added.
Reliance, with this strategic tie-up with MOL, has achieved a key milestone for the successful implementation of Ethane import project to feed crackers in India. The release added.