State-owned GAIL (India) Ltd is considering the import of ethane using very large ethane carriers (VLECs) to replace current feedstocks at its petrochemical facilities, a strategy similar to that of Reliance Industries Ltd. This move could reignite efforts by the local shipbuilding industry to manufacture these specialised vessels in India, reminiscent of the 2014 attempt to build LNG carriers that ultimately failed. A senior government official briefed on the matter confirmed that the strategy is under discussion at both high and working levels, though the project is still in the planning phase. Ethane, a key intermediate for the petrochemical industry, has become increasingly valuable, particularly following the shale boom in the U.S., which made it cheaper than other feedstocks. Reliance Industries began importing ethane in 2014, operating six VLECs in partnership with Japan’s Mitsui O.S.K. Lines, Ltd. The low cost of U.S. ethane has spurred more players to adopt this feedstock, with Drewry Shipping Consultants predicting increased demand for VLECs. GAIL is considering importing ethane to keep up with the market demand and rising prices. In 2023, GAIL issued an expression of interest for chartering a VLEC for 20 years, aiming to collect data on ship availability and sizing. The project could present an opportunity for Indian shipyards, especially with the government’s renewed push to promote local shipbuilding through a policy package nearing approval. This has led to discussions about the possibility of constructing some VLECs in India, a plan reminiscent of the government’s earlier attempt to build LNG carriers under the ‘Make in India’ initiative. In 2014, GAIL attempted to hire nine LNG carriers to ship gas from the U.S., with a stipulation that three ships be built in India. However, due to the lack of experience in building LNG carriers, local yards faced significant hurdles, and the plan ultimately collapsed. Despite this, GAIL is not opposed to building vessels in India if the local shipyards are ready. The official emphasised that while Indian yards have yet to build sophisticated vessels like LNG or ethane carriers, there is still ample demand for oil tankers, LPG carriers, and bulk carriers, which could provide enough work to keep local yards busy. He suggested that a gradual approach to increasing capabilities would be more feasible, allowing yards to scale up to the more complex projects over time. GAIL currently charters six LNG tankers from a mix of long, medium, and short-term deals, providing a portfolio approach to shipping. While the focus remains on chartering vessels, the possibility of domestic shipbuilding remains part of the broader strategy. (ET)