Global energy giant Shell is in talks with two shipyards to build up to six new next-generation hybrid liquefied natural gas (LNG) carriers.
According to Korean media and Trade Winds, Shell is in close negotiations with Jiangnan shipyard, a subsidiary of China State Shipbuilding Corporation (CSSC), and South Korean shipbuilder Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) over the specification, price and delivery date for the construction of up to six new next-generation hybrid LNG carriers. The new shipbuilding project is subject to Shell’s board approval, but the order is taking shape as contractual details such as price and schedule are negotiated with the shipbuilders.
In September 2023, Shell Shipping and Maritime, a subsidiary of Shell, together with Hudong-Zhonghua Shipbuilding, a subsidiary of CSSC, and Wärtsilä Marine, officially launched a new hybrid LNG carrier design, which signals that orders for this low-carbon and environmentally-friendly LNG carrier design will soon receive orders for actual vessels.
It is understood that the hybrid LNG carrier, which is built in a modularized manner and carries five compact gensets, no longer adopts the past configuration of two large two-stroke engines and four auxiliary gensets, which enables significant space saving on board and provides more possibilities for LNG carriers to increase cargo capacity. The compact propulsion system is said to achieve a cargo capacity of 185,000 m³ within a standard ship size and displacement of 174,000 m³.
Taking into account the actual operating conditions of LNG carriers, the new modular hybrid electric design reduces the weight of the equipments by more than 40%, and reduces fuel consumption by about 10%, greenhouse gas emissions by 15%, and methane escape by more than 20%. It means that on the premise of not affecting the portability of the LNG carrier, even if more cargo is loaded, the unit cost of freight transport and emissions per tonne of nautical mile will be significantly reduced, and the economy and environmental protection will be significantly improved.
With its flexibility in fuel usage, the hybrid system of this LNG carriers can easily switch to LNG, bio-LNG, synthetic LNG, HFO, MDO and various biofuels and their blends. Its hybrid power system gensets can operate at both high and steady state loads for more flexible and efficient operation, and engine wear will be reduced, significantly reducing maintenance costs.
For the competition for the order of six hybrid LNG carriers, Jiangnan Shipbuilding and Hanwha Ocean have their own competitive advantages.
In October 2023, Hanwha Ocean announced that it will build four large LNG carriers at the same time at the No. 1 dock of Hanwha Ocean Geoje Shipyard. Based on this, the No. 2 dock of Hanwha Ocean will also start building LNG carriers from 2024, which means that Hanwha Ocean’s production capacity of LNG carriers will be rapidly increased and can realize rapid delivery of the LNG carriers.
Large LNG carriers have become internationally recognized as high-tech, high-difficulty and high-value-added ships. Jiangnan shipyard has listed it as a key breakthrough strategic product, and is expected to complete and deliver its first built LNG carriers in early 2025.
In March 2022, Jiangnan shipyard entered the large LNG carrier construction market by signing two 175,000 m3 LNG carriers with ADNOC L&S, a subsidiary of Abu Dhabi National Oil Company (ADNOC). And Jiangnan Shipbuilding become China’s first shipyard to undertake MARK III membrane type large LNG carriers.
Although Jiangnan shipyard entered the large LNG carrier market relatively late, it is currently working on comprehensively improving the comprehensive competitiveness of large LNG carriers in batch construction and meeting the needs of new vessel fuel bunkering and liquid tank testing.
On April 8, 2024, the wharf project of Jiangnan shipyard’s large-scale LNG carrier construction capacity guarantee project passed the completion and acceptance smoothly. The wharf project combines the existing land-based production facilities in the Jiangnan shipyard and the production facilities related to the start-up project to enhance the comprehensive competitiveness of Jiangnan Shipyard’s batch construction of large-sized LNG carriers and effectively solve the problem of capacity limitation, enabling Jiangnan Shipyard to have the capacity to produce four 175,000 m³ LNG carriers per year.