Shell inks deals to charter six LNG newbuilds

A unit of the Hague-based energy giant Shell has agreed long-term charter contracts for six 174,000-cbm newbuild LNG carriers.

Shell has signed separate deals for two LNG ships each with affiliates of three firms.

These are Norway’s Knutsen, Korea Line Corporation, and ICBC Financial Leasing and institutional investors advised by J.P. Morgan Asset Management.

South Korea’s Hyundai Heavy Industries and Hyundai Samho Heavy Industries will build the vessels.

To remind, KSOE said last week its two yards would build four LNG carriers worth 891 billion won ($746 million).

The South Korean firm said that deals for two additional ships would follow later this month.

Assuming that one vessel has a price tag of about 223 billion won ($186.7 milllion), this puts the total order to more than $1.1 billion.

Shell secures 14 newbuild LNG carriers

The ships will join Shell’s time-chartered trading fleet with staged delivery expected to take place from mid-2023.

With the new deal, Shell has secured 14 LNG newbuilds for its fleet. The energy giant signed long-term charter deals with the trio for eight ships of the same class in December 2019.

The new vessels will all feature dual-fuel X-DF engines and boil-off management plants.

Additionally, the vessels will have air lubrication systems and shaft generators for auxiliary power.

The design and addition of energy efficiency technologies will give these ships the “best emissions performance in their class,” Shell said.

Shell’s head of shipping Grahaeme Henderson said these ships would deliver a 60% reduction in carbon emissions compared to 2004 steam turbine LNG carriers.

“Shell’s ambition is to be a net-zero emissions energy business by 2050 or sooner and highly efficient ships like these are one of the ways that we are reducing emissions in our operations,” he said.

“As we work together to develop new zero-carbon fuels at scale, we believe that LNG can play a fundamental role in providing a cleaner supply chain right now for the goods and energy that are shipped around the world every day,” Henderson added.

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