Eastern Pacific Shipping (EPS) has placed an order worth slightly more than $400m for LNG-fuelled newcastlemax bulkers to be chartered to Rio Tinto.
The Singapore-based shipowner said it has entered into an agreement with the Anglo-Australian minerals and metals mining giant for three LNG dual-fuelled newcastlemax vessels, with options for three more.
The 210,000-dwt ships will be built at New Times Shipbuilding and are scheduled for delivery from the second half of 2023.
While EPS did not disclose the details of the charter contract and the cost of the newbuildings, shipping sources with knowledge on the deal said the charter period is for at least five years and the shipowner is paying around $67m each for the bulker carriers.
"This partnership between EPS and Rio Tinto is another important step forward for industry-wide decarbonisation. We need like-minded companies to come together and use transitional fuels, like LNG, to get there,” said EPS chief executive Cyril Ducau.
“I am inspired by this partnership because it fulfils our sustainability ambitions and sends a clear signal that greener shipping is possible today,” he added.
EPS said LNG was a major component of the company’s environmental, social and corporate governance policy as it is a readily available and a proven way to reduce greenhouse gas emissions.
“Over the past few years, EPS has developed deep expertise and knowledge in the cleaner alternative fuel,” Ducau said.
Rio Tinto said it was looking to reduce its carbon footprint by incorporating LNG.
“We are delighted to include LNG dual-fuel shipping into our future fleet,” said Ashley Howard, Rio Tinto’s chief financial and operating officer for commercial.
“This keeps Rio consistent with industry best practice and will provide additional opportunity to meet our emissions reduction goals and overall value management performance.”
Rio Tinto is the second mining company to charter LNG-fuelled bulkers from EPS.
BHP was the first, when it agreed last August to charter five LNG-fuelled newcastlemax newbuildings from EPS for five years with the option to extend for an additional five years.
The 209,000-dwt vessels, to be built by China’s Shanghai Waigaoqiao Shipbuilding and New Times, are slated for delivery in the first half of 2022.
EPS remains Singapore’s top shipowner in both value and the number of ships it owns, according to research compiled for Singapore Maritime Week.
The shipowner has 122 vessels on the water and 56 on order.
