The second order in the world! Japan's first methanol dual fuel VLCC signed contract

The first methanol dual fuel VCC in Japan, jointly developed by four Japanese companies, has officially entered the construction phase.

On October 23rd, Japanese shipping company IINO Lines announced that it has placed an order for Japan's first methanol dual fuel 309400 deadweight ton VLCC at Nihon Shipyard. The new vessel is expected to be delivered in 2027 and will be leased to Idemitsu Tanker after delivery.

Japan Shipyard is a joint venture design company between two major shipbuilding giants in Japan, Imabari Shipbuilding and Japan Shipbuilding Union (JMU). The latest order marks the first time that Japan's shipbuilding industry has undertaken the construction of a methanol dual fuel VLCC, and it is also the second methanol dual fuel ship order in the VLCC field after Dalian Shipbuilding undertook the world's first order from China Merchants Shipping last year.

The specific price of the new ship has not been announced. As a reference, according to Clarkson's data, the current price of a 31500-320000 deadweight ton VLCC new ship is about $129 million, an increase of 1% compared to the same period last year's $128 million.

The ship design is based on the ship type concept developed by an alliance formed by Fano Shipping, Idemitsu Tanker, Nippon Mail, and Japanese shipyards. These four companies launched a joint research and development project on the conceptual design of a new generation of environmentally friendly VLCC in January this year. They plan to combine their respective expertise to validate/select new generation fuels and environmental equipment, launch conceptual designs, and ultimately build and operate the new generation VLCC.

This new ship has a total length of 340 meters, a width of 60 meters, a depth of 28.6 meters, a full load draft of 21 meters, and a carrying capacity of approximately 309400 tons. In addition to traditional fuel, the ship can also use methanol as fuel and is equipped with a shaft type generator that generates electricity through the rotation of the main propeller shaft, which is expected to reduce air pollutants such as carbon dioxide, sulfur oxides, nitrogen oxides, and particulate matter generated by the ship.

Methanol is expected to contribute to the greenhouse gas emission reduction strategy formulated by the International Maritime Organization (IMO). Japan Post Shipping claims that compared to using traditional heavy oil, methanol can reduce carbon dioxide emissions by about 15%. In addition, by using green methanol, such as biomethanol produced from biomass as raw material, and synthetic methanol (e-methanol) produced from hydrogen generated from renewable energy and recovered carbon dioxide, carbon dioxide emissions can be reduced to almost zero.

At present, over 90% of Japan's crude oil imports rely on the Middle East, and VLCC, which transports crude oil, plays an important role in the country's economic activities. In order to minimize greenhouse gas emissions during crude oil transportation, shipping companies are considering switching from traditional fuels to next-generation fuels and installing environmentally friendly equipment such as carbon dioxide (CO2) recovery systems. In order to address these issues, a consortium was formed in January this year, led by Idemitsu Tanker, in collaboration with Iino Shipping, Japan Post Shipping, and Japanese shipyards, to jointly develop a new generation of environmentally friendly VLCCs with the goal of reducing greenhouse gas emissions by over 40%.

It is understood that Idemitsu Kosan, the largest independent oil company in Japan, operates VLCC and VLGC for Idemitsu Kosan. At present, the fleet of Light Tanker operates 6 self owned VLCCs and 11 leased VLCCs. Considering that 5 VLCCs in its fleet are close to or over 15 years old, the company must consider updating its fleet.

Fano Shipping is a global shipping company headquartered in Tokyo, founded in 1899. As a shipowner and operator, Fano Shipping has been committed to developing shipping services, specializing in the transportation of natural energy resources and related products such as crude oil, LNG, LPG, petrochemical products, and bulk cargo. As of March 31, 2024, Fano Shipping owns and operates 96 vessels, including 4 VLCCs, 36 chemical tankers, 22 bulk carriers, 9 VLGCs, and 25 small liquefied gas carriers. The company also has 5 new ship orders, including 3 VLGCs, 1 flexible oil tanker, and 1 MR1 product oil tanker.

Unlike the container ship industry that actively uses alternative fuels, the progress of alternative fuels in the oil tanker field is still extremely slow, and dual fuel VLCCs are still few and far between. According to Clarkson's data, currently only 21 LNG dual fuel VLCCs and 2 biofuel VLCCs are in operation worldwide. In addition, in September last year, Dalian Shipbuilding undertook the world's first methanol dual fuel VLCC order from China Merchants Shipping.