COSCO Continues Methanol Commitment with New $2B Order for Containerships
Chinese shipping major COSCO joined the rush to new ship orders while continuing its commitment to methanol for the future of shipping. COSCO reports it signed a contract valued at $2.15 billion for new ships for its Latin America service. The carrier maintained its commitment to methanol despite signs the fuel which was recently touted as the future of shipping is losing some of its luster.
Orders of methanol ships have slowed after a big surge. Concerns over the supply and cost of green fuels and in particular e-methanol are believed to be creating near-term concerns. Maersk changed its statements saying that it sees multi-fuels in the future of the industry while admitting that it has elected a mix of methanol and liquified gas dual-fuel propulsion systems as part of its current fleet renewal program. Maersk said it was securing offtake agreements for liquified bio-methane (bio-LNG).
DNV in sharing its industry outlook said yesterday that the green methanol "happy hour" is over. They forecast a near-term focus on efficiency.
COSCO Shipping however has already made big investments in methanol-fueled shipping. Two years ago, COSCO ordered a dozen 24,000 TEU methanol dual-dueled containerships. That contract was valued at $2.9 billion with the ships to be built at two yards and delivered for both COSCO and its subsidiary OOCL. Those vessels are due to be delivered in 2027 and 2028. COSCO and MAN also announced an agreement for COSCO’s first methanol conversions to begin in 2025 for a total of eight vessels in its Camellia (13,800 TEU) and Virgo (20,000 TEU) class with options for additional Virgo and Pieces (20,000 TEU) class vessels.
The shipbuilding branch of the group is also developing its expertise in methanol. In addition to the vessels for the group company, COSCO’s shipyards also contracted to undertake the first methanol conversions for Seaspan. COSCO will conduct the first five conversions for the shipowner which had previously announced a program with charterer Hapag-Lloyd for methanol conversions.
The new order is for vessels specifically designed for COSCO’s Latin American service and they will have a capacity of 13,700 TEU. The design was developed by COSCO with China Shipbuilding and Ocean Engineering Design and Research Institute. The ships will have a length of 1,102 feet (335.9 meters) and will be built by Yangzhou COSCO Shipping Heavy Industries for delivery between May 2027 and March 2029.
The ships will have an enlarged capacity for refrigerated containers reflecting the Latin America route and COSCO’s specialization in refer services. In addition to the benefits of the methanol-fueled main engine and generators, COSCO is highlighting numerous other design elements to enhance the efficiency of the vessels.
The design incorporates both a bulb bow and a stern energy-saving device. They highlight the vessels will have the world’s largest capacity permanent magnet shaft generator. They are also incorporating a bow wind deflector, a hull air lubrication system, and intelligence ship management.
While the group is incorporating methanol as a key element of its decarbonization strategy, COSCO reports it is pursuing other elements within the group. For its inland and coastal shipping COSCO introduced the first all-electric carriers with batteries. They have also run a pilot project with biofuel which they said is helping to build strong momentum for the group.