Oriental Energy Will Spend $300 Million to Build 4 VLGCs

Beyond Shipping learned that Oriental Energy, a domestic private chemical enterprise plans to spend 304 million US dollars to build up to 4 VLGCs, The order for the new vessels will be taken by former partner Jiangnan Shipyard Co.,Ltd. 

Specifically, Oriental Energy is considering ordering two 930 million cubic metre VLGCs, which are expected to be delivered in 2023, with an option for two vessels.

In fact, among the fleet of Oriental Energy, there are two 84,000 cubic meters VLGCs built by Jiangnan Shipbuilding, namely “KEEGAN NO.1” and “KEEGAN NO.2”. The two ships were ordered in early 2018, when the cost of each ship was about 68 million US dollars and they were delivered in last October, according to the long-term tracking of Beyond Shipping.

It is said that Oriental Energy will pay $75 million to $76 million for each of the new LPG powered ships.

At the same time, the new ship will adopt the fourth generation patented line type, panda 93P, which is independently developed and designed by Jiangnan Shipbuilding and it is similar to the 3+3 VLGC order placed by Singapore ship owner Petredec in October last year. 

Notably, regarding the order, Oriental Energy confirmed the news and added that the newbuilding contract will be sighed ASAP. But as of press time, Oriental Energy has not issued any announcement on the newbuilding contract.

Data show that Oriental Energy, listed on the Shenzhen Stock Exchange, is the largest LPG importer in China, with an average annual import volume of about 10 million tons, of which about 5 million tons are used for PDH plants in Zhejiang province and Jiangsu province. LPG is mainly imported from the Middle East and the United States.

In addition, Oriental Energy is also engaged in the trading business, importing 5 million tons of LPG annually for third parties. In 2019, the company decided to divest its trading assets, which were taken over by Matheson Enterprises Limited.

It is said that the new ships are going to supply raw materials for the fourth PDH plant being built in Maoming, Guangdong province. The new plant, with an investment of 40 billion yuan, will produce polypropylene, polyethylene and hydrogen, and is expected to be put into operation next year.

Currently, Oriental Energy has more than 10 VLGCs under its control, including the two self-owned vessels mentioned above. The rest are leased from Pacific Gas Shipping, Kumiai Senpaku, etc. Their charter period range from 5 to 10 years.

In addition, Matheson Enterprises Limited plans to conduct an initial public offering (IPO) in Asia. It is reported that the company has communicated with Singapore Exchange Limited. Other locations, including Hong Kong and Shenzhen, are also listed as one of the places to consider for IPO.