CIMC plans to build a series of methanol-fuelled 2,900-TEU container feeder vessels. HANSA spoke with Yu Wang, Assistant President, CIMC Group[ds_preview]
HANSA: What’s your offer to the shipping industry?
Yu Wang: Besides finance leasing solutions, our subsidiary CIMC ORIC can provide modern designs of commercial and offshore vessels to the customer. Furthermore, we have two shipyards fully integrated into CIMC group and are shareholders in one more shipyard. It is our aim to combine all these capabilities. It is our ambition not only to provide the design, ship building capacities and finance leasing but also become one of the important suppliers of methanol to the shipping industry. We will also set up a methanol plant in China to produce green methanol, and the capacity will be increased as the demand rises.
Why does CIMC rely in particular on methanol as the future fuel?
Yu Wang: Green energy has high potential to help the shipping industry to get forward with the decarbonization, and fuels will play an important role. Our group pays great attention to it. We have done a lot of research on this, so we think that methanol as a marine fuel has many advantages compared to LNG, ammonia, or hydrogen when it comes to temperature, safety, supply and even equipment – if not now than in the next 20 years. While the production costs will initially be higher than those of other alternative fuels such as synthetic natural gas (SNG), its handling costs will be lower in the long run. Methanol has been used for decades as a base chemical in many industries – which means that all processes are well known and documented. In the future, the production costs of green methanol will significantly decrease whereas demand and supply will increase significantly, including in the container feeder segment.
How much will you be able to provide?
Yu Wang: According to our estimates, the yearly global demand for green methanol as marine fuel will be 1 mill. t in the short term and quickly increase to 2 mill. t. The worldwide production capacity for green methanol can only reach 1 mill. t in 2025, So production is currently the bottleneck when introducing green methanol to the market. Therefore, CIMC will build up a capacity of 50,000 t, that is only the first step. We will be able to increase to 200,000 t in 2025, subject to the market development.
Where do you want to find customers to buy this new fuel?
Yu Wang: CIMC ENRIC, another member of the group, has already signed a LOI with Maersk and will provide green methanol to one of the biggest shipping companies in the world. We believe other customers will certainly follow and we are in discussions with other big shipping lines. But to secure the supply we also need transport and bunkering capacities. The future development depends on the customers, on their demand as well on the ports where they will need the supply. We at CIMC are determined to meet the needs whenever and wherever they come up, not only in China but also in other parts of the world.
Containers, equipment, fuels – the range of services and products at CIMC is quite large. In addition, you will offer a leasing model for a methanol-fuelled feeder vessel of 2,900 TEU intake. What is special about the design and the offer?
Yu Wang: We have already spent over two years on the development of this new design, and we have identified a clear need among shipping lines for this type of vessel with a capacity of +2,000 TEU, especially in Europe, where specific regulations already are or will come into force. We leased three slightly smaller vessels to Maersk some years ago which are conventionally fuelled. The feedback we received on the performance of these 2.300-TEU vessels was very positive, so we used the original design as a blueprint to enlarge and modify the specifications.
The new design of 2,900 TEU is 22.5 m longer than the 2,300-TEU vessels, and can load more homogeneous boxes (14 t/TEU) and reefer boxes. The EEDI of the vessel is 48 % lower than the Phase III requirement, and the CII can meet the requirements which must be met in 2050. In addition, the hull lines design has been fully optimized based on the operation profile, which increased the fuel efficiency by around 8 % to 10 %.
How far have you progressed with this project?
Yu Wang: We have signed a newbuilding LOI with a shipyard and are now in the process of finalizing the design. In the future we would like to lead the market and to initiate the development of methanol-fueled vessels. Our 2,900-TEU container vessel is designed and optimized for the lowest carbon emissions in the market. The basic design had already been completed and get the class approval in principal by ABS, LR, DNV and BV. The HAZID analysis for the full methanol system had also been carried out together with the Class. The detail design will be completed early of next year. It is reasonably expected that, the first methanol-fuelled container vessel will be delivered by Q2 2025. With the development of the market, we believe more and more methanol-fuelled vessels will be put in order and delivered in the future.
Who are you aiming at with your new design?
Yu Wang: We see the European market as a future key market. Recently the big liner companies have bolstered their fleet capacity mainly by ordering large vessels from 15,000 TEU to 24,000 TEU. But for smaller feeder vessels, the orderbook is small and a large number of vessels are due to scrapping if they don’t meet the CII requirements. So there will be increasing demand for feeder vessels. CIMC can act as a tonnage provider to the liner companies, and we are also partnering up with European owners with finance leasing as we do already in other business segments. To our opinion, competition becomes more and more fierce. So providing finance solutions can be the decisive competitive advantage for a supplier.