H-Line Shipping, part of the South Korean private equity firm Hahn & Co, has confirmed newbuilding orders for two 180,000-dwt LNG-powered bulk carriers.
Who is building Newcastlemax pair?
To be built by Hyundai Samho Heavy Industries (HSHI) for charter to South Korean steel maker Posco, the Newcastlemax pair will be the world’s largest dual-fuel bulk carriers when they enter into service in 2021.
They will also be the first LNG-fuelled South Korean vessels that are not LNG carriers to sail on a foreign shipping route.
Plan in place for Newcastlemax
The bulk carriers, which have been contracted at a cost of US$123.8M, will carry iron ore from Australia to South Korea on delivery. Australia ships its total iron ore production of about 800M tonnes to overseas customers each year, a volume which accounts for more than 50% of worldwide seaborne movements of the product. Port Hedland is Australia’s largest iron ore port, accounting for 60% of the country’s export shipments.
In recent years a number of South Korean, Japanese and Chinese shipowners and yards, working in tandem with class societies, have developed concept designs for LNG-powered, Newcastlemax bulk carriers with Australian iron ore transportation in mind.
The breakthrough order
The H-Line contract for the two 180,000-dwt bulkers at HSHI is the breakthrough order and is expected to be the first of several by South Korean, Japanese and Chinese owners. The three Asian iron ore import countries are all developing the LNG bunkering infrastructure necessary to enable ship-to-ship fuelling operations to take place at major discharge ports, while in Australia Perth-based Woodside is reportedly assessing the construction of large LNG bunker vessels, with a capacity perhaps as high as 20,000 m3, to fuel dual-fuel bulkers.
The Contract
An order by H-Line for a pair of LNG-fuelled Newcastlemaxes was first mooted a few months ago but the formal newbuilding contract has only just been announced, on 12 October, literally days after Korea Ocean Business Corp (KOBC) stated it would make state aid available to cash-strapped domestic shipping firms seeking to advance eco-friendly projects.
Investments and subsidies
KOBC will make available up US$121.5M in guarantees to four shipping companies – Korea Line Corp, SK Shipping, H-Line Shipping and Polaris Shipping – and H-Line is set to be awarded US$8.5M from this pot to put towards its Newcastlemax newbuildings.
The funds are being provided through the Korean Ministry of Oceans and Fisheries’ eco-friendly ship conversion support programme. The scheme is providing subsidies equivalent to 5-10% of a newbuild vessel’s price when it replaces an older vessel aged 20 years or more with an eco-friendly vessel. South Korea has launched the programme ahead of the entry into force of the January 2020 sulphur cap, and LNG-powered ship construction, in particular, is being encouraged.
Capacity of the carrier
The north Asian designs for 180,000-dwt Newcastlemax bulkers feature pairs of IMO Type C LNG bunker tanks with an overall capacity of 6,000 m3, enough for a round trip to Australia. The tanks are positioned above the engineroom but below the main deck.
It is likely that the bunker tanks on the H-Line duo will be constructed of the new high-manganese austenitic steel developed by Posco for use in LNG cargo and fuel tanks.
At the 5th session of IMO’s Carriage of Cargoes and Containers Sub-committee (CCC 5), held in London in September 2018, interim guidelines on the application of high-manganese austenitic steel of the Posco type for cryogenic service were approved.
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Source: LNG World Shipping
