Al Seer Marine, a subsidiary of Abu Dhabi-based International Holding Company (IHC), has formed a $169.91 million joint venture (JV) with BGN International, a leading energy, trading, storage, and transportation company, to acquire a portfolio of Very Large Gas Carriers (VLGCs) for the transport of liquefied petroleum gas (LPG).
The JV has also agreed to award Hyundai Heavy Industries (HHI) in Korea with an order to build two new VLGCs, each with a capacity of 86,000 cubic meters. The new-build VLGCs are due for delivery in the first and second quarters of 2023 respectively, the companies said in a statement.
Mr. Reahd Al Kindi, Al Seer Marine’s Chairman, said, “Continued global demand for cleaner fuel-burning sources such as LPG in emerging markets will require greater infrastructure including VLGCs. We have identified this as an area of tremendous long-term growth and with the backing of the IHC, agreed to a partnership with BGN, one of the leading LPG and energy suppliers in the world.”
The demand for VLGCs is expected to be high in the market because of the limited supply of vessels. At the start of the year, there were only 312 VLGCs in the world, with 18 of those operating as storage units, the companies said.
Al Seer has identified an area of growth when it comes to exporting LPG and LNG (liquified natural gas) utilizing VLGCs. These vessels are normally 250 to 300 meters long and have four to six storage tanks on board, capable of loading anywhere between 100,000 to 200,000 cubic meters of gas.
Ms. Ruya Bayegan, CEO of BGN International, said, “With continued growth for LPG demand, expanding BGN’s global infrastructure will be critical. This joint venture with IHC and Al Seer Marine represents another strategic partnership for BGN and an opportunity for scalable growth in the foreseeable future.”
The partnership also marks a shift in strategy for Al Seer Marine, which previously engaged in multiple marine sectors like high-tech boatbuilding, unmanned systems development, and manufacturing.
“We have ordered two vessels from Hyundai Heavy Industries, the largest shipbuilder in the world, and depending on how we see demand, may well purchase further vessels or order more,” Mr. Al-Kindi added.
