MPC Container Ships orders methanol-fueled box ship duo

MPC Container Ships will use methanol fueled containerships to open up one of northern Europe’s first green corridors for carbon neutral transportation.

Oslo-headquartered MPC Container Ships ASA has joined the growing list of shipowners opting to order alternate-fueled newbuildings. It has placed an order with Chinese shipbuilder Taizhou Sanfu Ship Engineering for two carbon-neutral 1,300 TEU containerships powered by dual-fuel engines that enable operation on methanol as well as conventional MGO. In addition to an advanced hull design, optimized for economic sailing speeds, the methanol-fueled ships feature several onboard solutions contributing to the vessels’ overall efficiency including shore power connection, battery packs, shaft generators and twisted edge flap rudders.

The vessels will operate on 15-year time charters to North Sea Container Line AS (NCL), backed by CoAs (contracts of affreightment from various parties, including a 15-year CoA with Norwegian industrial group Elkem ASA, which has a 40% ownership stake in NCL.

The contract price of $39 million per vessel is covered by the contracted cash flows from the 15-year time charter with NCL at an initial rate of about EUR 16,300/day (about $16.000/day), before inflationary adjustment mechanisms.

The project has been supported by NOK 60 million (about $5.95 million) from the Norwegian NOX fund and NOK 13.7 million (about $1.35 million) in funding from by Norway’s Enova program.

The vessel owning entities will be majority owned by MPCC (90.1%) together with Topeka MPC Maritime AS (9.9%), a joint venture between Topeka Holding AS (a zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG.

Technical management will be by Wilhelmsen Ahrenkiel Ship Management.

GREEN TRANSPORTATION CORRIDOR

“I am excited to announce the order of two carbon-neutral newbuildings with long-term time charters,” said MPC Container Ships CEO Constantin Baack. “Together with our partners NCL and Elkem, this project allows us to set up a green transportation corridor in Northern Europe, proving our ability to identify and execute on opportunities that are accretive whilst allowing us to make the right move towards a further decarbonization of the fleet. It also demonstrates that we can meet ambitious environmental goals by joining forces with like-minded partners and we are looking forward to facilitating a green container shipping supply chain along the Norwegian coastline.”

Elkem, which is one of the world’s most environmentally-friendly manufacturers of silicon-based materials, says that the two newbuild ships will replace three of NCL’s current diesel-powered vessels, which will be phased out from operations.

“Our operations require a significant amount of transport across the value chain, including sea transport as the most climate-friendly mode of transport for bulk goods,” said Elkem CEO Helge Aasen. “These state-of-the-art vessels will further increase our efficiency through increased capacity and can potentially cut net CO2-emissions from 45 % up to 100% through the use of green methanol. This contract with NCL and the innovative newbuilding project with MPC Container Ships ASA is a great example of how operational excellence and sustainability can go hand in hand.” says Elkem’s CEO, Helge Aasen.

Law firm Watson Farley & Williams (WFW) advised MPC Container Ships on the order for the two methanol-fueled vessels. The firm’s cross-border that advised MPCC was led by maritime partner and Germany corporate services group head Dr. Christian Finnern, supported by senior associate Peter Graß and associate Marc Großmann. They worked closely throughout the transaction with London partners Robert Platt and Charles Buss.

“We very pleased to have once again advised MPCC on an important deal with regards to the decarbonization of the maritime industry,” said Finnern. “This innovative project will play a significant role in the creation of one of northern Europe’s first green corridors for carbon neutral transportation. That MPCC opted for WFW to assist them again highlights our standing as the ‘go to’ law firm for sustainable shipping expertise.”