KUALA LUMPUR:MISC Bhd is buying six six newbuild 98,000 cubic metres Very Large Ethane Carriers (VLECs) for US$726 million (RM3.09 billion) from China's Zhejiang Satellite Petrochemical Co Ltd.
Concurrently, MISC - through its vessel-owning entity Portovenere and Lerici (Singapore) Pte Ltd (PLS) - entered into time charter parties (TCPs) with Zhejiang Satellite for the time charter of the six VLECs for operations in international waters.
MISC said the VLECs would be chartered to Zhejiang Satellite through PLS for a firm period of 15 years.
"The charters for the VLECS are expected to commence in the fourth quarter of 2020.
"Samsung Heavy Industries Co Ltd and Hyundai Heavy Industries Co Ltd, both shipyards in Korea, are constructing three vessels each," MISC said in a filing to Bursa Malaysia today.
MISC president and group chief executive officer Yee Yang Chien said the group had made its entry into the global ethane market with these six VLECs and a new alliance in China.
"The acquisition marks a milestone in MISC's offerings for large scale ethane transport. Adding to the strength and expansion of our existing fleets as well as diversifying our portfolios, we are now the proud owner of six VLECs, which are the largest vessels of its kind, aside from the existing seven VLECs in the world," Chien said.
As one of the only three owners of such vessels in the world, he said, the new addition to its fleet would strengthen MISC's competitive advantage in the segment.
Chien said MISC had been making notable strides, as part of its effort to diversify portfolio, develop new solutions and enlarge presence with the addition of new markets, despite the challenging markets.
"The long-term charter parties are instrumental to the build up of our sustainable income stream; a clear reflection of long-term drivers that set our growth strategies and valuable investments. The fact that these milestones are achieved at a time like this, shows MISC's resilience and consistency in its virtuous growth," he added.
Zhejiang Satellite chairman and president Yang Weidong said through the pact, the group and MISC had started a new venture, in which the two parties would build a global logistics supply chain for chemicals together.
The supply chain was going to safeguard the world-leading ethylene cracker that is being built by Zhejiang Satellite, he added.
MISC is currently one of the largest single owner-operators of LNG tankers in the world with distinguished reputation for overall operational excellence, reliability, safety and on-time cargo deliveries.
At present, its LNG fleet comprises 29 LNG carriers and two FSUs with a combined deadweight tonnage (dwt) capacity of over two million dwt. Four LNG carriers are currently under construction.