Pacific International Lines (PIL) is mulling an order for two LNG-fuelled, 13,000-teu container ship newbuildings that may cost at least $300m in total.
The Singaporean liner company, which underwent a major restructuring last year, is said to have approached shipyards in China for a pair of neo-panamaxes.
According to shipbuilding sources, Singapore-listed Yangzijiang Shipbuilding and state-owned Jiangnan Shipyard are among the yards contacted.
A boxship expert said he is not surprised, adding that it is "natural for PIL to order some new ships as it needs vessels of this size for trade service to North America".
"The supply of 13,000-teu vessels is limited and it would be difficult to charter them," said the expert. "The company has benefited from a strong container ship market and is now cash rich."
And he believes more PIL orders could follow.
"Limited newbuildings slots from the shipyards could be the reason that it is starting off with only two vessels. But it may increase the number of ships at a later date."
A PIL spokesperson declined to confirm the deal and said her company preferred not to discuss specific plans.
"We regularly review our fleet size to ensure we are able to meet the market’s demands," the spokesperson said.
"Looking ahead, we expect to make incremental adjustments to our fleet to enable us to deploy our vessels in an optimal manner, as well as to meet the decarbonisation and sustainability objectives of our industry."
Shipbuilding sources said PIL is opting for LNG-powered ships that will feature GTT's Mark III Flex membrane containment systems. It is said to be seeking to have the pair of 13,000-teu vessels delivered by the end of 2024.
Brokers think the LNG-fuelled ships will cost PIL at least $150m each.
PIL was in financial distress for several years that stemmed from the challenging container ship market. Its balance sheet was exacerbated further by the outbreak of Covid-19.
The company was privately owned by the Teo family until Heliconia Capital Management — a subsidiary of state-owned investment company Temasek — took a majority stake early last year by investing $600m.
Online database VesselsValue shows PIL sold 24 vessels in 2020 before Heliconia's bailout. It sold nine ships last year, of which two were multipurpose vessels and one a supramax bulk carrier.
PIL recently reduced its debt by $1bn as it made an early payment to creditors who were subject to the scheme of arrangement that the company entered into as part of its restructuring in the first quarter of 2021.
PIL said the repayment will leave it "a well-capitalised company with a solid financial structure and resilience to address and mitigate the cyclical nature of the industry going forward".
Alphaliner ranks PIL as the 12th-largest liner company in the world, with container vessel capacity of 266,667 teu. It controls 83 vessels, of which 56 are owned and 27 are chartered.
