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Shell and Hapag-Lloyd sign multi-year LNG supply agreement
Shell Western LNG B.V (Shell) and Hapag-Lloyd today announced the signing of a multi-year agreement for the supply of liquefied natural gas (LNG) to Hapag-Lloyd’s ultra large dual-fuel container vessels of 23,500+ twenty-foot equivalent units (TEU). Bunkering for these twelve new vessels is expected to commence during the second half of 2023 and LNG will be supplied in the Port of Rotterdam. The modern ships will be deployed on Europe-Far East routes and call at major ports including Rotterdam, Hamburg, Singapore, and Shanghai.
Using LNG enables Hapag-Lloyd to immediately reduce the CO2 intensity of these vessels by up to 23% compared to conventional fuels1. Additionally, the use of LNG supports the almost complete reduction of particle emissions2. This is another important step for Hapag-Lloyd to reduce emissions and decarbonise its fleet in line with its goal of becoming net zero carbon by 2045.
As a hard-to-abate sector, Shell is exploring the viability of, and investing in a range of fuels, technologies and solutions that will help decarbonise shipping. This includes the use of LNG, where through an extensive network of 15 LNG bunkering locations in 10 countries globally, Shell has already achieved over 1,000 safe ship-to-ship bunkering operations to its marine customers.
In addition to the LNG supply agreement, Shell and Hapag-Lloyd have entered into a strategic collaboration agreement intended to accelerate the further decarbonisation of alternative marine fuels. Initial focus will be given to developing the potential of additional low carbon fuels solutions including liquefied biomethane and the hydrogen-based fuel liquefied e-methane. Liquefied biomethane as a marine fuel has the potential to reduce greenhouse gas emissions by between 65% and 100%3.
Tahir Faruqui, General Manager, Head of Downstream LNG at Shell, said: “We are delighted to have partnered with Hapag-Lloyd on this important initiative. Shipping decarbonisation must accelerate and, as the lowest-carbon fuel available at scale today, LNG is a key part of the transition to lower-carbon marine fuels. As we look to the future, we are committed to working with leading shipping companies like Hapag-Lloyd to establish the credible pathways to net zero.”
Jan Christensen, Senior Director Global Fuel Purchasing at Hapag-Lloyd: “We are pleased to share the execution of this long-term supply agreement. Hapag-Lloyd has finalised a contract with Shell which secures flexible LNG supply at competitive terms. Furthermore, we are excited about our agreement with Shell to explore further decarbonisation opportunities as it allows both businesses to drive impactful change in the industry. Collaborations like this are crucial in helping us deliver our sustainability strategy while also improving emissions in maritime shipping. Ultimately, this enables our customers to decrease their carbon footprint as well.”
This announcement supports Shell and Hapag-Lloyd’s long-standing collaboration, which over the past years included the LNG bunkering of the "Brussels Express", the world’s first large container ship that was converted to gas propulsion.