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COSCO Orders 12 Ultra-Large, Green Methanol Containerships for $2.9B

COSCO methanol containerships
COSCO will invest $2.9 billion for methanol dual-fuel ultra-large containership (COSCO)

Published Oct 28, 2022 4:17 PM by The Maritime Executive

China’s COSCO Shipping Holdings has confirmed earlier reports that it is planning a major ship expansion program announcing on October 28 that they have signed orders for 12 new 24,000 TEU containerships. The vessels will be methanol dual-fuel powered, designed to support its long-term growth strategy and transition to green shipping. The new orders are valued at $239.85 million per ship for a total of just under $2.9 billion.

The new vessels will be built in two tranches, with five of the ships coming from Dalian Cosco KHI Ship Engineering (DACKS), a joint venture shipyard with Kawasaki Heavy Industries. This group of ultra-large vessels will be delivered between February 2027 and June 2028 for operation by the COSCO branded shipping line.

The second set of seven vessels will be built by Nantong Cosco KHI Ship Engineering (NACKS), the company’s other joint venture shipyard with Kawasaki. Those vessels are expected to be delivered between the third quarter of 2026 and the third quarter of 2028. They are being assigned to Orient Overseas International Limited, the company’s Hong Kong-based shipping company.

In a stock exchange filing reporting the new contracts, COSCO says it has always practiced the concept of energy saving, carbon reduction, and green shipping and that the new vessels will expand on these strategies. Keeping with the green and low-carbon initiatives of global customers, the intent is to operate the ships using advanced green methanol dual-fuel technology. The filing included only a few details on the vessels but said they will integrate many energy-saving, emission-reduction, and intelligent ship technologies which will help to consolidate the group’s long-term cost advantage and enhance core competitiveness.

In September 2022 reports said that COSCO was planning an investment of $4.9 billion on fleet expansion including ultra-large vessels as well as midsized containerships in the range of 15,000 TEU. The group was reported to have 34 new vessels already on order with a total capacity of 580,000 TEU. Today’s order provides an addition of 288,000 TEU. 

COSCO is ranked as the world’s fourth largest carrier by capacity with a total of nearly 2.9 million TEU of capacity between its COSCO line as well as Orient Overseas and smaller operations according to Alphaliner. The current fleet is reported to be a total of 467 vessels. COSCO acquired Orient Overseas in 2018 to dramatically increase its market share and management has said its goal is to continue to grow to become the largest carrier. MSC remains the industry's current leader with over 4.5 million TEU of capacity and its own ongoing expansion effort.

COSCO joins Maersk in making a large investment in dual-fuel vessels designed to operate on methanol. At the beginning of October, Maersk announced it had ordered six additional methanol-fuled boxships in addition to a dozen 17,000 TEU ships and a smaller feeder ship already on order from South Korea. CMA CGM, which has focused on LNG, also made a first step toward methanol while many other segments of the shipping industry are exploring methanol. Norwegian Cruise Line recently reported it is exploring methanol and methanol conversions for its cruise ships while Pacific Basin announced yesterday that it has selected methanol for its next generation of dry bulk carriers.