Chartering giant Cargill has teamed up with Mitsui & Co to order the world’s first methanol dual-fuelled bulk carriers at Japan’s Tsuneishi yard, according to Lloyd’s List Intelligence. The order for an initial series of two kamsarmaxes was signed last month with the first ship scheduled to be delivered by the end of 2025 and the second by early 2026.
While the order has been placed with the intention of kickstarting a wider programme of methanol-fuelled ships in the bulker sector, the deal is smaller than initially planned. Cargill had been planning to plump for an initial series of between four to six kamsarmaxes.
According to Cargill Ocean Transportation president Jan Dieleman, the scaled back ambition reflected current market conditions and yard prices rather than any wider concerns regarding the future viability of methanol supply. Further orders are expected to follow once Cargill has had the opportunity to assess the market response to the initial tranche.
Commercial details of the order, which has been under discussion for several months, have not been released. Cargill has a long-established partnership with Mitsui on sustainability projects, most recently partnership with Maersk Tankers on the Njord platform, which aims to accelerate cost-effective and industry-wide greenhouse gas reductions. The decision to order in Japan was also based on established strategic partnerships.
The initial tender considered several designs from Chinese yards, but Cargill has not ruled out returning to China for the next series of methanol-fuelled orders it insists are coming. Availability of yard slots was a limiting factor in the negotiations and Cargill was up against competing deals in the container sector, where methanol-fuelled orders are rapidly increasing. Licensing on the methanol engine designs in China also remains “difficult”, according to Cargill.
Methanol was the second-most popular alternative fuel choice for newbuildings ordered in 2022 after liquefied natural gas, according to class society DNV’s monthly analysis of alternative fuels. LNG comprised 9.7% of ships on order and methanol 1.1%. Thirty-five dual-fuelled methanol ships were ordered, including 30 for large container vessels, bringing the total vessel count to 82, DNV said.