ZIM inks $1bn LNG bunkering deal with Shell

Shell will supply 10 LNG-fuelled vessels, which are expected to enter into service in 2023-24

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ZIM Integrated Shipping Services has struck a liquefied natural gas (LNG) deal with Shell, valued at more than $1 billion (£0.87bn).

They have signed a 10-year LNG bunkering deal, under which Shell will supply 10 LNG-fuelled vessels that will be deployed on ZIM’s flagship ZIM Container Service Pacific (ZCP).

The announcement comes as construction is underway on the first of ZIM’s LNG dual fuel containerships in South Korea.

The 10 vessels are expected to enter into service in 2023-24 and will be transporting goods from China and South Korea to the US East Coast and the Caribbean.

Around 23% of total shipping emissions come from the container segment alone and LNG is said to be the lowest carbon fuel available at scale today, providing around 20% less greenhouse gas emissions compared with conventional marine fuels.

On that basis, ZIM estimates the new LNG ships are equivalent to having two out of 10 vessels in the fleet with zero-emission.

Eli Glickman, ZIM President & CEO said: “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. 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.”