Matson places $1 billion order for 3 LNG-fueled box ships at Philly Shipyard

Aloha Class LNG fueled containership Daniel K. Inouye

Honolulu-headquartered Matson, Inc.(NYSE: MATX) reports that its Matson Navigation Company Inc. subsidiary has signed contracts with Philly Shipyard Inc. to build three new 3,600 TEU Aloha Class LNG-fueled containerships at an aggregate price of approximately $1 billion.

The first vessel is expected to be delivered in the fourth quarter of 2026 with subsequent deliveries in 2027.

The new Jones Act compliant vessels will join two Aloha Class ships previously built for Matson by Philly Shipyard that entered service in 2018 and 2019, respectively.

Like their sisterships, the new vessels will be equipped with dual fuel engines that are designed to operate on either conventional marine fuels or liquefied natural gas (LNG), as well as other “green ship technology” features, such as a fuel-efficient hull design and environmentally safe double hull fuel tanks and freshwater ballast systems.

While the earlier ships require some modification to operate with LNG, the new ships will be delivered LNG-ready.

“Our existing Aloha Class ships are among the fastest, most efficient vessels in the Matson fleet,” said Matt Cox, Matson’s chairman and chief executive officer. “These new Jones Act compliant vessels will be built specifically for our China-Long Beach Express (CLX) service, and like their sisterships, are expected to help Matson achieve its 2030 greenhouse gas emissions reduction goal while also providing additional capacity and speed benefitting our Hawaii service as well as the CLX.”

The 854-foot Aloha Class vessels are the largest containerships ever built in the U.S. and are designed to operate at speeds in excess of 23 knots in support of Matson’s service hallmark – timely delivery of goods.

Prior to Matson’s first two Aloha Class ships, Philly Shipyard delivered four newly built Jones Act containerships for Matson between 2003 and 2006.

“It is the ultimate compliment when a former customer returns for another project. We are proud of the six vessels previously delivered to Matson, and are again ready to execute and deliver this important project.” said Steinar Nerbovik, Philly Shipyard president and chief executive officer.

The three new Aloha Class LNG-fueled box ships will replace three vessels currently deployed in Matson’s China-Long Beach Express (CLX) service, which will in turn replace three older vessels currently deployed in its Alaska service, redeploying bigger and faster vessels into that trade lane.

Matson expects to finance the new vessels with cash currently in the MARAD Capital Construction Fund (CCF) and through cash flows from operations, borrowings available under the company’s unsecured revolving credit facility and additional debt financings.

HISTORIC BACKLOG AT PHILLY SHIPYARD

Philly Shipyard, Inc. (PSI) is the sole operating subsidiary of Oslo-listed Philly Shipyard ASA, in which Aker Capital ASA is the largest shareholder with a 57.56% stake.

“Winning this order creates historic backlog for Philly Shipyard, as well as great visibility through 2027 for its shareholders and other stakeholders,” said Kristian Rokke, chairman of the board of Philly Shipyard ASA. “Long term, it also supports the yard’s vision to deliver quality vessels, while pivoting between commercial and government contracts.”

The contract award further bolsters Philly Shipyard’s current order backlog, consisting of five National Security Multi-Mission Vessels (NSMVs) for Tote Services LLC and one Subsea Rock Installation Vessel (SRIV) for Great Lakes Dredge & Dock Company, LLC. With the three containership contract from Matson, Philly Shipyard’s order book is now the largest in its 25 year history at over USD 2 billion.

Measuring 854 feet long, the three new Aloha Class vessels will match the length of the two existing Aloha Class ships, currently the largest Jones Act containerships ever constructed.