8 January 2015
Leading international law firm Watson Farley & Williams (“WFW”) is pleased to announce that it has advised Reliance Industries Limited (“Reliance”) of India on the commercial arrangements entered into between Reliance and Mitsui O.S.K. Lines, Ltd (“MOL”) of Japan, in relation to the transportation of liquefied ethane from the US to India.
Following Reliance’s commitment during 2014 to source some 1.5 million tonnes per annum of ethane from the USA to feed its chemical complex in Gujarat, India, Reliance has moved swiftly to put in place the necessary seaborne transportation arrangements. Advised by WFW, Reliance first entered shipbuilding contracts with Samsung Heavy Industries in South Korea for the construction of the world’s first six dedicated Very Large Ethane Carriers (VLECs). It has now entered into a strategic association with MOL for the supervision of the construction of the six VLECs, which are expected to deliver from late 2016 onwards, and thereafter the operation and management of the vessels.
The 87,000m3 capacity VLECs are a hybrid of LNG carrier and LPG carrier and their delivery of liquefied ethane, a natural gas component, for use as a petrochemical feedstock in Reliance’s refineries in India is a natural by-product of the shale gas revolution which will generate large volumes of ethane in the US.
Mumbai-headquartered conglomerate Reliance is India’s largest private sector company and is ranked 114th on the Fortune Global 500 list of the world’s largest corporations. The company operates in five major sectors: exploration and production, refining and marketing, petrochemicals, retail and telecommunications, and contributes about 14% of India’s total exports. Tokyo-headquartered MOL is one of the largest shipping companies in the world.
WFW partner Nigel Thomas, said: “I am delighted that such a world class group as Reliance selected WFW to advise it on these important seaborne transport arrangements with a new asset class. It is exciting to be playing a part in another feature of the shale gas revolution.”