France’s CMA CGM is kicking off a new era for container shipping after delivery of the first in a series of more than 20 LNG-fuelled large containerships designed for the east-west trades.
The 14,800-teu CMA CGM Tenere (built 2020) sailed at the weekend from Tianjin on its maiden voyage from Asia to northern Europe.
The vessel, previously called the Morecambe Bay, was delivered last week from South Korean shipbuilder Hyundai Samho Heavy Industries to the ship's owner, Singapore’s Eastern Pacific Shipping (EPS).
The handover preceded delivery on Tuesday of the 23,100-teu CMA CGM Jacques Saade, the first of a series of nine LNG-fuelled ultra-large containerships scheduled to be taken into operation and owned by the French carrier.
The CMA CGM Jacques Saade was slated to embark on its maiden voyage this week.
Both the CMA CGM Tenere and CMA CGM Jacques Saade will initially operate as two of 12 containerships on the Marseille-based carrier’s French Asia Line (FAL) service.
CMA CGM operates the weekly FAL service as a member of the OCEAN Alliance together with partners Cosco Container Lines, Orient Overseas Container Line and Evergreen Line.
New era
The entrance into service of the CMA CGM Tenere marks a watershed moment for the container shipping industry.
CMA CGM already operates four LNG container vessels on the intra-Europe services. The liner giant has begun to introduce the first of six LNG-fuelled vessels of 1,380 teu on services operated by its subsidiary Containerships.
But the French line remains the only major carrier to have taken on the challenge of operating large LNG-fuelled containerships between Asia and Europe.
Hapag-Lloyd has begun retrofitting the 15,000-teu Sajir (built 2014) at China's Huarun Dadong Dockyard with a 6,500-cbm LNG tank.
But the delayed project is seen as a test case and the German carrier has not yet shown a serious commitment to LNG fuelling.
The reluctance of other liner operators to commit to gas had consequences for charter rates of large LNG-propelled containerships.
While conventional scrubber-fitted vessels of 15,000 teu fetch rates of around $40,000 per day, a dearth of charterers is seen as limiting the increased earnings potential of LNG-fuelled boxships.
Brokers said that EPS has been seeking to obtain rates in excess of $50,000 per day for large LNG-propelled containerships.
The Singapore owner ordered the six Hyundai Samho vessels in April 2018 for $130m each and subsequently secured 15-year charters with CMA CGM at $55,000 per day.
But brokers have cast doubt on the shipowner's ability to obtain similar rates for its remaining LNG-powered ships. That is because CMA CGM is presently the only large liner charterer of LNG-fuelled containerships.
Prior to the impact of the coronavirus, EPS was linked to orders for larger containerships at Hyundai Heavy Industries and South Korea’s Daewoo Shipbuilding & Marine Engineering.
But its website lists just 11 LNG-fuelled vessels for delivery by the third quarter of 2022, comprising the six Hyundai Samho ships and five under construction at HHI.
LNG flag carrier
CMA CGM emerged as the pioneer of gas in 2017, when it ordered the nine 23,000-teu LNG-powered vessels.
The vessels, which are being constructed at Hudong-Zhonghua Shipbuilding and Jiangnan Shipyard, are being fitted with 18,600-cbm, membrane-type LNG bunker tanks. That is enough to make a 63-day round voyage between Europe and China without the need to refuel.
The CMA CGM Jacques Saade and its eight sisters are expected to be deployed on the Asia-North Europe service. It is expected to be employed alongside three scrubber-fitted, 21,000-teu ships built in 2018, according to Alphaliner.
The smaller CMA CGM Tenere is equipped with a 12,000-cbm LNG fuel tank, but this is enough fuel capacity for an Asia-Europe round trip on a single filling.
The CMA CGM Tenere and its five sisters ultimately are expected to operate along on the Asia-Med trades, according to Alphaliner.
But the 15,000-teu ships will initially be deployed in the trades to northern Europe due to a shortage of gas bunkering options in the Med, the analyst said.
