Samsung Delivers World's Largest Ethane Carriers

India's Reliance Industries celebrated the delivery of the world's largest ethane carriers on Wednesday, the 87,000 cubic meter-capacity Ethane Crystal and Ethane Emerald.

Until recently, the world's largest ethane carriers were in the range 22,000 cubic meters. Lloyd's Register played a leading role in designing ships in Reliance’s much larger vessel category, which its creators have named the Very Large Ethane Carrier (VLEC). 

The Samsung-built carriers use GTT containment membranes. MOL will operate the vessels on behalf of Reliance. 

The Crystal and Emerald will carry liquefied ethane from Enterprise Product Parters' terminal on the Houston Ship Channel to Dahej, India, where the gas will supply three Reliance petrochemical plants. 

Reliance plans to build four more of the vessels with Samsung. 

The gas supply comes from Enterprise's Mont Belvieu fractionation complex in Texas, which is connected to production from the East Coast's Marcellus and Utica Shale regions via the ATEX pipeline. The Marcellus and Utica are also the natural gas source for the shipments leaving Sunoco's Marcus Hook, Pennsylvania terminal for ethylene plants in Europe.

Before Sunoco, Enterprise, Reliance, INEOS, Borealis and others began moving forward on export plans, ethane was a surplus commodity in the U.S.; annual production capacity exceeded demand by about six million tons last year. Gas producers have dealt with the surplus by "rejecting" much of their ethane – leaving it behind in their processed natural gas, the low-cost methane fuel burned for heating and power generation. This means that historically, U.S. ethane prices have closely tracked the low Henry Hub natural gas prices, and several foreign petchem firms have stepped up to take advantage.

However, analysts with Genscape expect demand to outgrow the U.S. ethane supply potential by 2018, due to rising exports and new petchem plants on the Gulf Coast. Platts predicts that even if prices rise with demand, much of the supply potential will still be "rejected" into the natural gas stream because the pipeline capacity for transporting it is nearly full – potentially creating a domestic ethane shortage by 2018.

Reliance has its own multi-billion-dollar investments in natural gas E&P in the Marcellus. It sold its stake in a project in Texas’ Eagle Ford Shale last year.

Inset image copyright lappino / shipspotting.com (full size available here)