Kumiai Navigation’s VLGC newbuilding is part of the company’s fleet renewal and expansion programme.
Kumiai Navigation of Singapore has returned to Kawasaki Heavy Industries for another VLGC newbuilding.
Tomomaru Kuroyanagi, managing director of Kumiai Navigation, confirmed to TradeWinds that his company had inked a letter of intent for one 84,000-cbm gas carrier at the Japanese shipyard.
He added that the LPG-propelled dual-fuelled ship is the latest design conceptualised by KHI. It forms part of the company’s fleet renewal and expansion programme.
“The trend of environmental friendly emissions is accelerating in the world,” Kuroyanagi said. “If low sulphur fuel oil [LSFO] and scrubbers are the first phase, next comes LNG/LPG-fuelled engines.
“Currently, LNG fuel projects are ahead of LPG fuel, but it is very natural and reasonable that LPG carriers use LPG as a fuel. LPG fuel must be the one of best alternatives for [the] next generation.
“Compared to LNG, LPG is more convenient and cost effective since we are able to utilise existing infrastructure such as shore tanks, LPG supply berths and LPG pressurised vessels.
“I am a strong believer in the future of LPG fuel, but this new project might be challenging for midsize company like us,” he added.
“However, if you look at outside of Japan, Equinor, Exmar, BW LPG, and Oriental Energy are already moving ahead for LPG fueled vessels. I don’t want our company or Japanese yards be left behind in this field,” said Kuroyanagi.
“KHI and our company have a relationship with VLGCs that stretches over 30 years. I am confident about their performance potential even though this will be the first such project in Japan.”
Kuroyanagi did not disclose the price of the newbuilding but says it will cost 8% to 10% more than a conventional VLGC.
The vessel’s delivery date is slated for the second half of 2021.
Kumiai’s ship will be the fourth VLGC newbuilding to date to be constructed with an LPG engine as owners weigh up their choices to meet the IMO’s tougher emissions standards from 1 January 2020.
Exmar was a pioneer in ordering LPG fuelling, contracting two VLGCs at Hanjin Heavy Industries & Construction’s Subic Bay yard in the Philippines, while China’s Tianjin Southwest Maritime (TSM) signed up for one plus one 86,000-cbm newbuildings with domestic Jiangnan Shipyard last month.
Kumiai also has a pair of 82,200-cbm VLGCs under construction at KHI. It is due to take delivery of one vessel next month and the other in early 2020. The duo will be built to IMO Tier II standards and be fitted with scrubbers.
Kumiai has already secured employment for the first newbuilding, which has been fixed out to Japan’s Gyxis Corp. However, the second remains charter-free.
Japan’s Sasaki Shipbuilding is also constructing two 5,000-cbm pressurised LPG carriers for Kumiai.
The small LPG carriers are also part of the company’s fleet diversification plan. The duo has been fixed out to Norway’s Equinor and are scheduled for delivery in July 2019 and February 2020.
Besides gas carrier newbuildings, Kumiai also has a 208,000-dwt newcastlemax bulker and a 61,000-dwt bulker under construction at Nantong Cosco KHI Ship Engineering (Nacks) and Dalian Cosco KHI Ship Engineering (Dacks), respectively.
The duo was ordered at the end of last year and due for delivery in mid-2020.
The newbuildings were ordered against charter contracts from a Japanese company and a German grain trader.
The outfit recently sold its oldest VLGC — the 79,000-cbm Ocean Orchid (built 2001) — to an undisclosed Middle East-based buyer for $24m, a price described as being slightly higher than expected.
Kumiai has a fleet of 14 vessels on the water, including three VLGCs built between 2v003 and 2017. The rest are bulkers.