Reliance Industries inks agreement with Japan's Mitsui to import ethane from North America

Reliance Industries (RIL) has inked shipping agreement with one of the world’s largest shipping company– Mitsui OSK Lines Ltd (MOL), for transporting liquefied ethane from North America to India.
As per the agreement

• MOL will supervise the construction of six Very Large Ethane Carriers (VLECs), ordered by RIL.
• These VLEC’s are hybrid version of LNG carrier and LPG carrier. They will be delivered before end of 2016.
• As part of strategic tie-up between two companies, MOL will also manage and operate the vessels after they are built and delivered.

Background
Earlier in August 2014, RIL had decided to import 1.5 million tonnes per annum of ethane from US as feedstock to its cracking units in India. Imported Ethane will be primarily used as a petrochemical feedstock to produce ethylene by steam cracking.
After the shale revolution, North America is expected to produce large volumes Ethane, a natural gas component. Thus it will help to produce liquefied natural gas (LNG) and cooking gas LPG in abundance.

Month: Current Affairs - December, 2014