H-Line Shipping has formalised orders for South Korea’s first LNG-fuelled oceangoing ships.
The company has ordered a pair of 180,000 dwt Capesizes from Hyundai Samho Heavy Industries (HSHI). H-Line was established when private-equity player Hahn & Company acquired the dedicated shipping portfolios of Hanjin Shipping and Hyundai Merchant Marine.
HSHI is expected to deliver the units in 2021.
The ships, which will ply the Australia–South Korea route 10 or 11 times a year, will be used to transport cargoes for POSCO from 2021.
South Korea’s Ministry of Oceans and Fisheries (MOF) said the government will bear 6.4% of the KRW150 billion (USD132 million) newbuilding costs.
Currently, there are three South Korean-owned LNG-fuelled vessels, including a Supramax bulker, one cleaning vessel, and one port boat, all of which are domestic or shortsea units.
Subsidising the H-Line vessels is part of the South Korean government’s push to encourage local shipowners to adopt liquefied natural gas (LNG) bunkering.
The International Maritime Organization’s global sulphur cap, which will come into effect in 2020, restricts sulphur content in marine fuels to 0.5% from the current limit of 1%. Shipowners can choose to install scrubbers or burn low-sulphur fuel oil or other fuels such as LNG.
The MOF has issued a host of incentives to encourage the building of LNG-powered vessels and the use of LNG bunkers.
These include subsidies of 5–10% of the costs of constructing LNG-fuelled vessels if the ships replace old units.