Hanwha Ocean signs intent to build 1.7 trillion won LNG ships for Hapag-Lloyd

Hanwha Ocean has signed a letter of intent for the construction of liquefied natural gas (LNG) dual-fuel container ships with the German shipping company Hapag-Lloyd, it was reported on the 9th.

According to reports from the shipbuilding and shipping specialist media TradeWinds on the same day, Hapag-Lloyd is considering ordering six 16,800 TEU LNG container ships from Hanwha Ocean. The total contract amount is $1.2 billion (1.7 trillion won).

The order in question was originally to be placed with Chinese Yangtze Shipbuilding, but it is also noted that they are considering entrusting it to Hanwha Ocean. The relatively low prices of Hanwha Ocean's ships and the state of U.S.-China relations are believed to have influenced this decision.

Hapag-Lloyd ordered six 23,500 TEU container ships from Daewoo Shipbuilding and Marine Engineering (now Hanwha Ocean) in June 2021. At that time, the price of the ships exceeded $200 million (about 224.5 billion won) each, and they were scheduled to be delivered starting in 2027, but the construction contract was not finalized.

Subsequently, Hapag-Lloyd signed a construction contract for 12 units of 16,800 TEU LNG dual-fuel container ships with Chinese Yangtze Shipbuilding. The contract price per ship was $210 million (approximately 287.3 billion won), and the delivery period is reported to be from 2027 to 2029.

The contract includes an option clause allowing Hapag-Lloyd to place an additional order for six ships. However, it has been decided that Hapag-Lloyd will order this quantity from Hanwha Ocean in accordance with the letter of intent signed in 2021.

Reports also indicated that Hapag-Lloyd made the decision to transfer the order from Chinese companies to Hanwha Ocean, considering the relatively low ship prices and the possibility of delivery in 2027.

Additionally, there are indications that shipping companies that have recognized the United States' intensified checks on Chinese shipbuilders due to tariffs and sanctions are turning their attention to other shipbuilders outside of China.

TradeWinds also noted that Hanwha Group has been attracting shipowners with aggressive marketing after finalizing the acquisition of Daewoo Shipbuilding and Marine Engineering in early 2023. The media quoted a source as saying that Hanwha Ocean is also on the verge of signing a construction contract with the Taiwanese shipping company Evergreen.

Earlier, TradeWinds reported that Evergreen is expected to place orders for 11 units of 24,000-ton LNG container ships to be shared between Hanwha Ocean and Guangzhou Shipbuilding, with projections of ordering six ships from Hanwha Ocean and five from Guangzhou, with prices expected to reach $250 million.