LPG shipowners eyeing potential for ethane carriers

German shipowner Hartmann Reederiei has been among the first movers in the sector. “We are absolutely convinced the ethane market is just in the beginning of developing,” Jan-Lars Kruse, managing director of Hartmann told the Marine Money Asia conference in Singapore on Tuesday.

Last week Hartmann announced it was forming a joint venture United Ethane Carriers with Jaccar Holdings, which will start out by commercially managing five 85,000 cu m VLECs.

Hartmann is to also bareboat charter for 15 years three 36,000 cu m liquid ethane gas carriers being built at Sinopacific Shipbuilding and due for delivery in 2016.

Others are also eyeing the VLEC and ethane shipping market with interest. “It is on the radar. It is a new kind of business that has a lot of potential driven by shale gas,” said Harpal Cheema, from the LPG division of Phoenix Tankers, a company owned by Mitsui OSK Lines. “Yes we see a lot of potential but we’ll let these guys take the lead,” he added.

BW LPG cfo Vijay Kamath said, “We’re definitely interested in that space. We’re looking at it very closely.”

While ethane carriers are a new concept the technology used to run them is not new, according to Kruse. However, it has required approvals and they have received approvals for the first engines to run on ethane. The approval process has taken over two years.

Cheema agreed the technology was not new. “It's just old wine in a new bottle, the technology has been tried and tested," he said.