COSCO SHIPPING Lines plans to build 9 LNG-powered ultra-large container ships

2017-06-26 09:00

French shipowner CMA CGM recently stated that it is considering ordering LNG-powered ultra-large container vessels. Container ships CMA CGM is expected to order up to 9 ultra-large container vessels of over 20,000 TEU. The order includes 6 firm orders and 3 options, exceeding the vessel capacity. The total transaction value of this order is expected to exceed US\$1.4 billion. It is expected that Chinese shipyards may provide financing for the new vessels.

According to newbuilding brokers, CMA CGM is currently inquiring with shipyards about \"gas ready\" container vessels. It is understood that these container vessels are expected to be designed with LNG power, and the cost may be US\$150-160 million per vessel, while adding LNG power may increase the cost of each vessel by at least US\$20 million.

CMA CGM stated that its previous concerns about the readiness of LNG supply infrastructure, the impact of LNG fuel tanks on the capacity of container vessels, future fuel pricing, and the current difficulties in the container shipping market have hindered its actions in ordering LNG-powered ultra-large container vessels.

However, individuals working in the LNG fuel supply sector stated that if a key operator in the industry decides to order LNG-powered vessels, this will send a signal to other operators to take similar actions, a pattern that has also been reflected in the cruise sector recently.

An equipment manufacturer stated that if CMA CGM decides to order LNG-powered vessels, this will also serve as a business case for other shipping companies, thus driving other companies to follow suit.

It is understood that CMA CGM's move appears to be an open preparation for the implementation of stricter marine pollutant emission regulations in 2020. Earlier this year, Rodolphe Saade, the current CEO of CMA CGM, signed a three-year memorandum of understanding with Patrick Pouyanne, Chairman and CEO of TotalEnergies. According to the memorandum, TotalEnergies agreed to combine its expertise to meet the new requirements.

According to the agreement, TotalEnergies will support CMA CGM by becoming its \"multi-purpose supplier\". It is understood that the company is providing solutions for the design and gas supply of LNG-powered fuel tanks for container vessels. Shipyards involved in CMA CGM's newbuilding projects are unwilling to disclose further details of the discussions on newbuildings.

A broker predicts that Chinese shipyards may provide financing for the new vessels. The broker stated that all major shipyards will be eager to receive such large container vessel orders to absorb their order backlog in the newbuilding market where ordering activity is scarce.

Industry observers stated that CMA CGM has sufficient reasons to order new vessels. Currently, shipyard prices are very cheap, and CMA CGM failed to obtain this type of container vessel when it acquired Orient Overseas Container Line and American President Lines in June last year. However, as part of the Ocean Alliance, CMA CGM is unlikely to overextend its financial situation through any orders.

Waigaoqiao again receives an order for two 180,000-ton bulk carriers from Fuhua.

Rumors say COSCO Shipping Group will acquire Orient Overseas Container Line.

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