Japanese shipping giant Mitsui O.S.K. Lines, Ltd. (MOL) is about to place an order for seven 88,000 cbm LPG dual-fuel very large gas carriers (VLGCs), according to Trade winds.
HD Hyundai Heavy Industries and Hanwha Ocean are expected to win four of MOL’s VLGCs, with both shipyards getting two VLGCs each worth up to $125 million each. The remaining three VLGCs will be built by Japan’s Kawasaki Heavy Industries for $120 to $125 million each.
The new vessels are expected to be delivered between 2027 and 2028.All seven VLGCs are capable of transporting both liquefied petroleum gas (LPG) and liquid ammonia. However, each vessel is expected to have a slightly different cargo capacity. The VLGCs designed by South Korean shipyards can carry up to 98% ammonia, while Kawasaki Heavy Industries designs vessels that can carry 85-87% ammonia.
As the world moves towards decarbonization, ammonia is gaining importance as one of the cleaner sources of energy. Demand for long-distance transportation of ammonia continues to grow, with about 60 Very Large Ammonia Carriers (VLACs) having been ordered by shipowners around the world in the past 18 months. According to Clarksons, orders for VLACs, VLGCs and Ultra Large Ethane Carriers (ULECs) this year amounted to 163 vessels, of which 71 are under contract.
Japan’s ammonia demand is expected to surge. The country’s ammonia demand is estimated to increase to 3 million tons in 2030 and 30 million tons in 2050. In response to the country’s ammonia transportation needs, MOL is expanding its VLGC fleet, and the owner, which currently owns about 40 vessels, expects to continue ordering new vessels.