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Danaos Hedges its Bets, Adding Scrubbers to "Methanol-Ready" Hulls

daehan
Tanker specialist Daehan Shipbuilding has won an order for four "methanol-ready" boxships for Danaos (Daehan Shipbuilding file image)

Published Apr 12, 2022 7:32 PM by The Maritime Executive

The non-operating owner Danaos Corporation is hedging its bets on the next generation of boxships by investing in tonnage that can run on HFO or (with a small amount of conversion) the future fuel methanol. 

Danaos has placed orders for four 7,200 TEU container ships from Daehan Shipbuilding in South Korea. The midsize hulls are not as attention-grabbing as the latest 24,000 TEU Megamaxes, but they will help fill an "underbuilt" market niche, according to Danaos.

The vessels will be "methanol fuel ready," and they will be delivered with open loop scrubbers in order to run on HFO. Scrubbers currently provide a significant economic benefit for the charterer. Fuel-cost savings achievable by burning HFO instead of VLSFO are running in the range of $200 per tonne (30 percent), based on pricing at Rotterdam. The series will also be IMO Tier III and EEDI Phase III compliant, and the first ships expected to be delivered to Danaos in the first half of 2024.

"The current world developments are pointing out to significantly elevated fuel prices in the future and bearing in mind the uncertainty of green fuel availability we are following a strategy of investing into the most fuel-efficient vessels," said Danaos CEO Dr. John Coustas in a statement. 

Scrubbers will minimize the fuel cost today, Coustas said, while the ships' design will retain the option to modify the vessels for green methanol propulsion when adequate supplies of this future fuel are available. Methanol is the green fuel of choice for Maersk's future containership fleet, among others. 

"This strategy removes the risk of technical obsolescence while it delivers short and medium term benefits on the fuel cost front. Further the midsize segment is the one which is most underbuilt, and replacement will be required," said Coustas. 

The selection of Daehan may reflect the ultra-tight market for containership building slots. The yard is not traditionally a boxship builder: it has long specialized in midsize tankers, and it just won the first containership order in its history in October 2021. However, open slots at the mega-size shipyards that build large boxships have effectively disappeared through 2023, booked up in a recent ordering frenzy. 

In January 2022, Daehan was acquired by Korean private equity firm KH Investment, the same company that bought STX Offshore last year.