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    Shell clinches $1bn LNG bunkering deal with Israel's ZIM


ZIM will receive 10 LNG-fuelled ships to run on its shipping routes from Asia to the US east coast and Caribbean.

by: Callum Cyrus

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Natural Gas & LNG News, Asia/Oceania, Liquefied Natural Gas (LNG), News By Country, Israel

Shell clinches $1bn LNG bunkering deal with Israel's ZIM

An LNG-fuelled very large container ship (VLCS) fleet will for the first time operate on Asia to North America freight liner routes, following a $1bn sales and purchase agreement (SPA) for LNG fuel supply between Shell and global container ship operator ZIM Integrated Shipping Services, ZIM announced August 31.

ZIM said on August 31 that 10 ships, each the size of 10 twenty-foot equivalent units (TEUs), would join its Container Service Pacific line delivering freight to and from Asia, specifically from China and South Korea, to the US east coast and the Caribbean region under a 10-year SPA contract.

The vessels are due to arrive at ZIM's facility in 2023-24. ZIM's Container Service Pacific line serves Asian markets including China, Japan, Malaysia, Indonesia and Israel.

Around 23% of shipping GHG emissions stem from container carriers, ZIM claimed, and this footprint will continue to expand given the anticipated escalation in global goods trade. ZIM considers the introduction of 10 LNG ships to be equivalent to removing all carbon emissions from two conventional vessels.

Last year, IHS Markit predicted the real value of global trade would rise 6.5% yr/yr, though in 2022 it expects a sharp dip in growth to around 4.3%. LNG offers decarbonisation of shipping at scale, producing 20% less GHG emissions versus conventional marine fuels.

Steve Hill, Shell's executive vice president of energy marketing, stressed decarbonisation of shipping could wait no longer with LNG bunkering the clear low emissions favourite, and the option of liquefied biomethane and e-methane to build a "credible" net zero pathway.

Hill said: "We would like to congratulate ZIM for introducing the world's first LNG-fuelled Very Large Container Ship (VLCS) fleet to operate on the Asia-North America shipping route. We are delighted to collaborate with them on their impressive efforts to reduce emissions in their maritime supply chain."

On behalf of ZIM, CEO and president Eli Glickman said he was pleased to have tied up an SPA with Shell on what he sees as relatively "competitive" terms. He added: "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."