RIL sells stake in shipping arm to Mitsui OSK
Reliance Ethane Holding Pte Ltd, RIL’s Singapore-incorporated subsidiary, has signed binding definitive agreements with Mitsui OSK and an unnamed strategic minority investor for selling stakes in its six limited liability companies that own one vessel each.
A statement issued by RIL on Wednesday did not give any financial detail of the deal, which is in line with the company’s bid to sharpen focus on its core activities and leave peripherals such as logistics to more suitable partners. Reliance had in 2014 commissioned building of these six ethane vessels to Samsung Heavy Industries‘ shipyards in Korea.
Globally, end-use companies that own vessels usually rope in a shipping entity to operate the fleet. Mitsui, which has a fleet of 850 vessels, is currently the operator of the six ethane carriers owned by Reliance Ethane through an equal number of limited liability companies. The deal with Reliance will help Mitsui expand its fleet with specialized ethane carriers.
Reliance imports some 1.6 million tonne of ethane from the US to replace natural gas and naphtha as feedstock at its petrochemical plants in Gujarat. Using ethane, a natural gas component produced in large volumes in the US, has reduced the company’s petrochemicals feedstock cost by about 30%.
Reliance, which used 2.5 million tonne a year of naphtha as feedstock in petrochemical crackers, has contracted ethane supplies for more than 20 years from the US. Ethane reduced naphtha usage by 500,000 tonne. The company began receiving ethane consignments from the US in 2017.
News credit : Indiatimes