Reliance Industries inks shipping deal with Mitsui OSK Lines
Billionaire Mukesh Ambani-run Reliance Industries Ltd (RIL) on Thursday sealed a long-term agreement with Japan’s biggest shipping company Mitsui OSK Lines for transportation of liquefied ethane from North America to the Gujarat coast.
Mitsui will manage six very large ships for carrying ethane that are being built by Samsung Heavy Industries shipyard in South Korea for RIL. The Japanese company will supervise the construction of 87,000 cubic meter ships and manage the vessels once they are delivered.
“Reliance with this strategic tie-up with Mitsui, has achieved a key milestone for the successful implementation of the ethane import project to feed crackers in India,” the company said in a statement.
Mitsui, in a separate statement, said that the very large ethane carriers (VLECs), being built by Samsung, are expected to be delivered in the last quarter of 2016. Neither of the companies disclosed the value of the deal.
Ethane, a natural gas component, is expected to be produced in large volumes in North America due to the shale gas revolution, which has generated an abundance of liquefied natural gas (LNG) and cooking gas LPG. Ethane is primarily used as a petrochemical feedstock to produce ethylene by steam cracking.
RIL plans to ship 1.5 million tonnes of ethane a year from its US shale joint ventures to its chemical complex in Gujarat. The company has two joint ventures in Pennsylvania’s Marcellus Shale-one with Chevron, in which it has invested $1.7 billion, and another with Houstonbased Carrizo Oil & Gas, in which it has invested $392 million.
It has a third JV, in which it invested $1.5 billion, in Texas’ Eagle Ford Shale with Dallasbased Pioneer Natural Resources. Mukesh Ambani-led RIL’s business spans petrochemicals, exploration and production, retail and telecommunications. Samsung will deliver the ships to be used for ethane transportation, from October 2016 to January 2017.