LNG

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. 

Kosmos Energy, the US shareholder in the floating liquefied natural gas joint venture offshore the West African nations of Mauritania and Senegal, halved its losses in the first quarter and said material progress was made across all the major workstreams of the LNG project centred on the Greater Tortue-Ahmeyim gas fields.

GasLog Ltd., the Monaco-based LNG carrier fleet owner with 19 vessels and with another 15 ships held by its US affiliate GasLog Partners, said it signed an export credit agency-backed debt financing facility of $1.05 billion with 12 international banks for its current newbuilding programme.