Orders for a batch of dual-fuel 15,000 teu vessels may be in the pipeline of the state giant’s Hong Kong-based container line shipping subsidiary. The newbuilding project could be worth more than $1.3bn in total at current price estimates
State giant Cosco, which owns 73.7% of OOIL, has been reluctant to burn LNG on its new vessels out of concern that the supply and infrastructure of the super-cooled fuel is not yet mature.
That view was highlighted by company chairman Xu Lirong in an interview with Lloyd’s List.
Being able to match up with the vessel deployment of CMA CGM, its Ocean Alliance partner, is one of the main reasons behind the consideration of the dual-fuel engines, according to one of the sources.
The French carrier is forming a sizeable fleet of LNG-fuelled 15,000-teu class ships on Asia-Europe and transpacific trades via ordering or chartering in newbuildings.
Linerlytica analyst Hua Joo Tan said Cosco’s change of mind, if true, would be more of a product of China’s decarbonisation target. The country aims to hit peak CO2 emissions before 2030 and aims for carbon neutrality by 2060.
“The decision would appear to be driven more by political considerations rather than economics or alliance unity,” said Mr Tan.
The alleged ordering plan also comes with owners’ rising appetite for investing in fresh tonnage since the past year, fuelled by a combination of factors.
Those include a lockdown-led boom in freight rates and the resulting explosion in carriers’ earnings, the demand for more efficient vessels when facing the stricter emission rules, and a rosy outlook about future market conditions.
Taiwanese shipping line Evergreen, another Ocean Alliance member, unveiled a plan earlier this week to build 20 15,000 teu containerships worth up to $2.6bn.
That was followed by an announcement by compatriot Wan Hai Line about an agreement with Hyundai Heavy Industries to build five of the nine 13,000 teu ships the intra-Asia specialist planned to order to expand its transpacific presence.
The company told a recent results conference that it was “cautiously optimistic” about the market prospects, with smooth contract negotiations with US shippers and strong consumer demand expected to be supported by US’s $1.9trn economic stimulus plan.
