ZIM Integrated Shipping Services Ltd. on Wednesday announced it has signed a liquefied natural gas (LNG) bunkering deal valued at more than $1 billion with Shell NA LNG, LLC as the Israeli container shipping seeks to reduce emissions from its operations.
Under the 10-year sales and purchase agreement, Shell will supply 10 LNG-fueled vessels that will be deployed on ZIM's flagship ZIM Container Service Pacific (ZCP), on the Asia to USEC trade. The 15,000 TEU vessels are expected to enter into service during 2023-2024 and will be transporting goods from China and South Korea to U.S. East Coast and the Caribbean. The agreement with may also cover other trades where ZIM LNG vessels could be deployed, the company said.
About 23% of total shipping emissions are from the container segment alone, and with increasing global trade of goods. LNG is the lowest carbon fuel available at scale today and it provides approximately 20% less greenhouse gas (GHG) emissions when compared to conventional marine fuels. In addition to GHG emissions reduction, LNG emits virtually no Sulphur oxides (SOx) and particulate matter (PM), while significantly reducing nitrogen oxide (NOx) emissions.
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."
Steve Hill, Executive Vice President, Energy Marketing at Shell, said, "We would like to congratulate ZIM for introducing the world's first LNG fueled very large containership (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. Decarbonization of the shipping industry must begin today, and LNG is a lower emission fuel choice currently available in meaningful volumes, and via liquefied biomethane and liquified e-methane, offers a credible pathway to net zero GHG emissions."