ZIM inks $1 billion LNG bunker supply deal with Shell
Written by Nick Blenkey
Eli Glickman, ZIM President & CEO: “We have positioned ZIM as a leader in carbon intensity reduction among global liners.”
Haifa, Israel-headquartered ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) has signed a 10-year marine liquefied natural gas (LNG) sales and purchase agreement with Shell NA LNG LLC. Valued at more than $1 billion, the contract covers the supply LNG to the ten LNG-fueled vessels that will be deployed on ZIM’s flagship ZIM Container Service Pacific (ZCP), on the Asia to U.S. trade. These ten 15,000 TEU vessels are expected to enter into service during 2023-2024 and will be transporting goods from China and South Korea to U.S. East Coast and the Caribbean.
ZIM notes that about 23% of total shipping emissions are from the container segment alone and say that, with increasing global trade of goods, “these emissions need to be addressed on a prompt basis.”
Citing a recent study on LNG as a marine fuel, ZIM says that LNG is the lowest carbon fuel available at scale today and provides about 20% less GHG emissions compared to conventional marine fuels. In addition to GHG emissions reduction, LNG emits virtually no sulfur oxides (SOx) and particulate matter (PM), while significantly reducing nitrogen oxide (NOx) emissions.
ZIM says that, for it, on the basis that LNG emits around 20% less GHG emissions when compared to conventional marine fuels, using LNG on these ten ships is equivalent to having two out of the ten vessels in the fleet with zero emission.
“With the addition of significant LNG-powered capacity to our fleet, beginning in 2023, we have positioned ZIM as a leader in carbon intensity reduction among global liners,” said Eli Glickman, ZIM president and CEO. “We are pleased to execute this long-term supply agreement with Shell to secure LNG at competitive terms and look forward to partnering with a global industry leader such as Shell as we take an important step to ensure our fuel sourcing is well planned and of the highest quality. Our growing LNG-powered fleet will enable ZIM to be more carbon and cost efficient, while improving our competitive position, particularly on the strategic Asia to USEC trade, and allowing customers to reduce their carbon footprint.”
“We would like to congratulate ZIM for introducing the world’s first LNG fueled very large container ship (VLCS) fleet to operate on the Asia-North America shipping route,” said Steve Hill, executive vice president, energy marketing at Shell. “We are delighted to collaborate with them on their impressive efforts to reduce emissions in their maritime supply chain. Decarbonization of the shipping industry must begin today, and LNG is a lower emission fuel choice currently available in meaningful volumes, and via liquefied biomethane and liquefied e-methane, offers a credible pathway to net zero GHG emissions.”
ZIM says its agreement with Shell may also cover other trades where ZIM LNG-fueled vessels could be deployed.
