ZIM to Operate First LNG Fueled Vessels in Asia to USEC Trade
Agreement Secures Competitive Terms and Efficient LNG Supply
ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a global container liner shipping company, has announced the signing of a ten-year marine liquefied natural gas ("LNG") sales and purchase agreement, valued at more than one billion US Dollars, with Shell NA LNG, LLC ("Shell") to supply ten LNG-fueled vessels that will be deployed on ZIM's flagship ZIM Container Service Pacific (ZCP), on the Asia to USEC trade. These ten 15,000 TEU vessels are expected to enter into service during 2023-2024 and will be transporting goods from China and South Korea to US East Coast and the Caribbean.
About 23% of total shipping emissions are from the container segment alone1 and with increasing global trade of goods, these emissions need to be addressed on a prompt basis. LNG is the lowest carbon fuel available at scale today and it provides ~20% less GHG emissions when compared to conventional marine fuels.2 In addition to GHG emissions reduction, LNG emits virtually no Sulphur oxides (SOx) and particulate matter (PM), while significantly reducing nitrogen oxide (NOx) emissions.
For ZIM, on the basis that LNG emits ~20% less GHG emissions when compared to conventional marine fuels, using LNG on these ten ships is equivalent to having two out of the ten vessels in the fleet with zero emission.
Eli Glickman, ZIM President & CEO, stated, "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 Container Ship (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."
The above-described agreement with Shell may also cover other trades where ZIM LNG vessels could be deployed.