Hapag, Shell sign multi-year LNG supply agreement

Shell Western LNG B.V (Shell) and Hapag-Lloyd announced the signing of a multi-year agreement for the supply of liquefied natural gas (LNG) to Hapag’s ultra large dual-fuel container vessels of 23,500+ TEUs.

"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," says a release from Hapag. The modern ships will be deployed on Europe-Far East routes and call at major ports including Rotterdam, Hamburg, Singapore, and Shanghai, the release added.

Using LNG enables Hapag-Lloyd to immediately reduce the CO2 intensity of these vessels by up to 23 percent compared to conventional fuels. "Additionally, the use of LNG supports the almost complete reduction of particle emissions. 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."

In addition to the LNG supply agreement, Shell and Hapag 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 percent and 100 percent."

Tahir Faruqui, General Manager, Head of Downstream LNG, Shell says: “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 credible pathways to net zero.”

Jan Christensen, Senior Director, Global Fuel Purchasing, Hapag-Lloyd adds: “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.”

The 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 converted to gas propulsion, the release added.