Reliance Industries has signed an agreement with Mitsui OSK Lines Ltd, one of the world’s largest and shipping companies, for transporting Liquefied Ethane from North America to India.

The Japanese shipping company will supervise the construction of six Very Large Ethane Carriers (VLECs), ordered recently by Reliance. MOL will also operate and manage the vessels after they are delivered, said Reliance in a statement on Thursday.

With this strategic tie-up, Reliance has achieved a key milestone for the successful implementation of ethane import project to feed crackers in India. The company has ordered six VLECs from South Korea's Samsung Heavy Industries for $723 million (Rs 4,500 crore). The vessels of 87,000 cubic metres each, will be the world's first VLECs.

The company intends to save about $450 million per annum by importing 1.5 million tonnes of ethane from the U.S. for its petrochemical plant, said a research report of CLSA.

Imported ethane will substitute its current propane imports and a portion of naphtha used for ethylene production at its refinery. Given the depressed US ethane prices and rising production, the annual saving of $450 million from this feedstock substitution from FY18, said the CLSA report.

Recently, Reliance announced its plans to import 1.5 mtpa of ethane from North America which will be used as a feedstock at its existing crackers in India. The company has executed storage capacity agreement for liquefaction of ethane with a North American terminal. Imports is expected to start by 2016-end.

It is also expected to convert a large portion of its 0.9 million tonnes naphtha-based Hazira cracker into dual feed to enable use of imported ethane as a feedstock.

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