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Rokke set for ethane deal
Petrochemicals giant Saudi Basic Industries is to ship US produced ethane into the UK as a new feedstock for an existing plant.
Sabic said it is “capitalising on shale gas opportunities in the US by modifying its cracker at Teesside, UK, into a gas cracker.”
Three 36,000-cbm gas carrier newbuildings contracted at a total price of $243m by Norway’s Ocean Yield at Sinopacific Offshore & Engineering for delivery in second half 2016 are being linked to the business.
The vessels were originally billed as ethylene carriers when the order was announced in May but TradeWinds understands they are expected to be used primarily to ship Sabic’s ethane volumes into the UK.
Ocean Yield is chartering the vessels, which will run on ethane, to Germany’s Hartmann on a bareboat basis for 15 years.
The ships are being commercially managed by group company Gaschem Services. When they were contracted Hartmann was said to have found a “strong counterparty” for the ships over 10 years, with five options of a year each.
The former Braemar Shipping Services, now Braemar ACM Shipbroking, is understood to have brokered the newbuildings. Gas department director Steve Wilson declined to give any details.
Sabic said the cracker conversion will is scheduled to be completed during 2016. The company added that the switch is “expected to result in long-term, reliable supply of cost-competitive products.”
The Saudi Arabian company is among other petrochemical plant operators moving to cash in on the US’ ongoing ethane glut.
Aside from shipments to Europe, the supply surge is also prompting the growth of a new long-haul trade to Asia which will require the use of very large ethane carriers (VLECs).
Norwegian investor Kjell Inge Rokke is the largest shareholder in Ocean Yield.