Wan Hai splurges up to $2.5 billion on new box ships

According to a disclosure to the Taiwan Stock Exchange Wan Hai has inked a Letter of Intent (LOI) with Taiwanese yard CSBC for twelve 8,000 teu container ship newbuildings with options for a further four units. The newbuildings would be fitted with methanol dual-fuel propulsion.

The contract with Wan Hai’s Singapore-based shipowning arm Wai Hai Lines (Singapore) is priced at between $102.5 million and $124 million per vessel. Including the four option vessels the total value of the order could be up to $1.984 billion.

Delivery dates for the newbuildings were not disclosed.

The Taiwanese line also inked a second LoI with South Korean yard HD Hyundai Samho for four 8,700 teu methanol dual-fuel newbuildings.

Priced at $113.5 million to $130.41 million per vessel, the total value of the order at Hyundai Samho is the range of $454 million - $521.64 million. Delivery dates were not disclosed.

The combined value of the two sets of orders is up to $2.501 billion if the options at CSBC are exercised.

The orders by Wan Hai adds to a raft of contracting for new container ship tonnage recently which have included 27, mainly LNG-dual container ships contracted by tonnage provider Seaspan Corp, and twelve 19,000 teu boxships ordered by MSC at Zhoushan Changhong.

Related:Seaspan orders 27 dual-fuel container ships

The order marks Wan Hai first methanol dual-fuel vessels and comes at a time that many container lines and owners have turned back to LNG dual-fuel over concerns of availability of green methanol and potential pathway to net zero with bio-LNG.

Analyst Alphaliner described Wan Hai’s choice of methanol dual-fuel as “at least somewhat surprising”.

“Most shipping lines that moved toward new fuels started with LNG and later added methanol as a second option. Even Maersk, the staunchest supporter of Methanol, recently had to diversify and opt for LNG-powered newbuildings, admitting that the sourcing of ’green methanol’ remained challenging,” Alphaliner commented in its weekly newsletter.

“Without a comprehensive sourcing strategy that accompanies the vessel orders, many of the new methanol dual-fuel ships will likely start their careers on conventional bunkers.”