Twenty new ethylene carriers needed by 2015 - ship owner

02 March 2011 12:27 Source:ICIS News

BRUSSELS (ICIS)--The anticipated increase in global ethylene production capacity will require 20 new ethylene vessels to be built between 2011 and 2015, a major gas ship owner said on Wednesday.

“Historically we have seen world ethylene as monomers traded seaborne at 4% of world ethylene production,” said Terje Orehagen, president and chief operating officer (COO) of Norgas Carriers at the one-day 6th ICIS World Olefins Conference in Brussels, Belgium.

“We expect a steady recovery from 2010 forward… which would represent an additional 1.25m tonnes of ethylene exports per year… and will require 20-25 ships of above 8,000 cubic metres (cbm) for regular long haul transportation,” he added.

“It takes two years to build a [gas] ship, so the ethylene shipping market will remain balanced to tight,” he said.

China is only 50% self-sufficient in ethylene, and this will be a driving factor in demand for gas shipping, he added.

The proportion of world ethylene production which is transported by sea has been steady at 4% in the past five years, and a third of this volume is through traders.

There is a maximum of 148 vessels in the world which can carry ethylene, but more than 30% of them are occupied in the trade of propylene, butadiene and vinyl chloride monomer (VCM), Orehagen said.

“A huge number of new gas carriers came on to the market in 2006-2007, but strangely all of them have been absorbed,” he added.

In response to questions from the floor about the problem of piracy, he remarked that for his fleet, which is regularly passing through the Gulf of Aden, “it is like preparing for war every time”.

Vessels are delayed by two to five days in waiting for naval escorts, and additional security personnel are required for three days, boarding in Egypt and leaving in Sri Lanka. The alternative would be to take an extra 10 days to go round South Africa, he said.

The vessel hijackers are well informed about ship movements.

“The pirates are googling vessels and arrival dates,” he added.

For more on ethylene visit ICIS chemical intelligence

By Barbara Ortner