Cosco-controlled company is opting for low-sulphur fuel oil but making its ships LNG-ready as it ducks scrubber solution.
Hong Kong-based Orient Overseas Container Line (OOCL) is closing in on an order for a series of neo-panamax boxships worth up to $1bn, but is bucking the trend on fuelling choices to meet 2020 emission standards.
Shipbuilding sources say the company, which is now controlled by Chinese state-owned giant Cosco Shipping Holdings, is planning to order up to eight 13,000-teu newbuildings.
They explain that the liner company will not have direct ownership of the newbuildings, which will be contracted through Chinese leasing companies.
Sources close to the company say the newbuildings will be LNG-ready but are being designed to run on low-sulphur fuel oil. They will not be fitted with exhaust-gas scrubbers.
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The choice of fuelling is significant for a Cosco-controlled company and market players say this will likely send a signal to other companies in the Chinese market considering how to make their ships 2020 compliant.
An OOCL spokesman said: "OOCL is looking to growth, and we will let the market know about our plans at the appropriate time."
The company, which was earlier owned by the Tung family but officially came under the control of Cosco in July with the latter splashing out $6.3bn in the takeover, has formed good relationships with South Korea’s Samsung Heavy Industries and DSME, as it has previously ordered newbuildings there.
But industry watchers comment that the liner company may give SHI and DSME “a miss” in this round of orders and opt to have the vessels built in China as it is now a Chinese-owned outfit.
Shipbuilding sources say Shanghai-based Hudong-Zhonghua Shipbuilding (Group) is highly likely to be the shipyard with which OOCL will be signing up the 13,000-teu newbuildings.
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The China State Shipbuilding Corp (CSSC)-controlled shipyard has previously built a series of 5,000-teu and 8,000-teu boxships for OOCL. Hudong-Zhonghua is also constructing five 22,000-teu, dual-fuelled newbuildings for France’s CMA CGM.
One containership player is surprised that OOCL is looking to order the 13,000-teu boxships, saying: “It seems a bit rushed as the company was [only] recently acquired by Cosco.”
However, other shipping sources say OOCL has been enquiring on the vessels for some time, but the project was delayed due to the takeover.
Another says the 13,000-teu vessels are flexible for trading. The ships can be deployed for most of the trade service routes.
“The 13,000-teus can be used for US East Coast, US West Coast, Red Sea, Mediterranean or even the east coast of South America if the LOA [overall length] is not too long," he said.
The enlarged Cosco-OOCL group now ranks as the world's third-largest liner operator.