LNG

European maritime classification society DNV said that there was still momentum in orders for LNG-powered vessels from ship owners in the month of November even at a time of very elevated LNG bunker prices in ports such as Rotterdam in the Netherlands.

According to the latest figures from DNV’s Alternative Fuels Insight (AFI) platform, 17 LNG vessels were added in November with container vessels and car carriers constituting nearly two thirds of the orders.

The total order figure for LNG-fuelled ships for the year to date has now reached 203 and the overall total is 857 ships operating or on order.

“With the preliminary agreement at the European Union last week that shipping would be included in the EU's Emissions Trading System starting from 2024, all low-carbon options now makes even more sense,” said Martin Wold, Principal Consultant in DNV’s Maritime Advisory business.

“Methane emissions will also be included, so methane slip from engines will come under even greater scrutiny,” added Wold.

Containerships lead

The DNV data showed that the total number of LNG-powered ships in operation or on order at the end of November 2022 comprised in the largest sectors 42 containerships in operation and 176 on order, 10 car carriers operating and 106 on order, 46 crude oil tankers operating and 43 on order and 42 oil-chemical tankers operating and 46 on order.

There were also 68 bulk carriers using and planning to use LNG, 50 car and passenger ferries, 39 cruise liners, 38 tugs, 37 offshore supply vessels and 32 RoPax ships.

This data does not include smaller inland vessels and barges that are part of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub transportation in northwest Europe.

Analysts note that LNG remained the preferred low-carbon solution despite current gas pricing which is expected to last into the near future.

That’s as LNG priced in fuel oil terms at Rotterdam increased on December 6 to $2,414 a tonne compared with $1,890 per tonne on November 6.

Among other emissions-reducing fuels, Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port declined over the past month to $690.00 per tonne on December 6 versus $923.50 per tonne on November 6.

Oct 31 (LNGJ) - Mitsui OSK Lines, the Japanese shipping company with an operating fleet of around 100 liquefied natural gas carriers, reported a more than doubling of fiscal first-half net profits to 603.64 billion yen ($4.10Bln) compared with 278.07Bln yen ($1.88Bln) for its overall business including oil tankers, car carriers, containerships and dry-bulk vessels. MOL manages its LNG carriers and other fleets through six firms based in Tokyo, London, Hong Kong, Jakarta, Oman and Algeria and also has extensive fleets in the other sectors.

   MOL said first-half shipping revenues from April to the end of September came to 821.33Bln yen ($5.56Bln). “While continuing to generate stable profit through existing long-term charter contracts, the LNG carrier business posted a year-on-year decline in profit partially due to the expiration of some long-term contracts,” said the company. “The floating storage and regasification unit (FSRU) business posted a year-on-year increase in profit,” it added.

Seaspan Corp. a subsidiary of New York Stock Exchange-listed Atlas Corp. and with a fleet of 127 containerships, has entered into a long-term charter deal worth $1.5 billion with Israel’s ZIM Integrated Shipping for 10 LNG-powered, dual-fuel newbuilds.

Seaspan said the 10 vessels of 7,000 twenty-foot unit (TEU) capacity are expected to be delivered from the fourth quarter of 2023 and through 2024.

Seaspan said the construction of the LNG-capable containerships are being assigned to shipyards and will be financed from existing liquidity, cash flow from operations and additional borrowings.

The company, which provides many of the world’s shipping lines with alternatives to vessel ownership by offering long-term leases on ships, said the 10 modern 7,000 TEU dual-fuel, LNG-capable containerships will have an aggregate purchase price of around $1.05Bln and 12-year charters totalling about $1.8Bln of gross contracted cash flow.

This is the second major Seaspan-ZIM charter deal after the February 2021 agreement for 10 LNG-fuelled containerships of 15,000 TEU capacity to serve across ZIM's various global niche trading routes.

Seaspan, which has main offices in Hong Kong and Vancouver in Canada, as well as a crewing office in Mumbai in India, said the deal with Haifa-based ZIM Shipping was a “forward-thinking” project.

“We see these modern 7,000 TEUs to be the natural successor to the ageing global pool of conventional vessels in the 4,000 to 9,000 TEU range, where relatively little fleet renewal has taken place,” said Bing Chen, Chairman, President and Chief Executive of Seaspan.

“We are experiencing strong customer interest for this vessel size,” he added.

Eli Glickman, ZIM’s President and CEO said he was delighted with the deal.

Clarksons Platou Securities, the investment banking arm of the London-based Clarksons Group, acted as financial and professional advisor to ZIM in connection with this transaction.

“We are very pleased to once again partner with Seaspan as we strategically enhance our operating fleet to further facilitate our long-term strategy,” explained Glickman.

“With this second long-term chartering agreement, we are securing access to our core fleet, while maintaining operational agility with respect to the total number of vessels we operate. We are investing in state-of-the-art ‘green’ vessels that use the cleanest technology currently available,” stated the ZIM CEO.

Graham Talbot, Chief Financial Officer of Seaspan, said the company continued to execute its growth plan in a prudent manner.

“In line with all of our vessel investments, we have de-risked the $1.05Bln capital expenditure associated with the dual-fuel LNG containerships by signing long-term charters with a leading global line,” he added.

“We remain diligent on our path toward an investment grade credit rating, and operational scale will play an important role in this pursuit,” explained Talbot.

Since December 2020, and including the latest ZIM deal, Seaspan has announced 55 newbuild vessel orders. 

Gaztransport and Technigaz (GTT), the French LNG storage technology company, has received another order for a China-built LNG carrier as its Chinese business links increase and broaden.