Hong Kong's Wah Kwong orders more LNG carriers banking on growing trade

Source: Market Screener

SINGAPORE, April 22 (Reuters) - Hong Kong-based shipping company Wah Kwong is finalising a deal later this month to double the number of liquefied natural gas (LNG) carriers that it has ordered to four, as it eyes growing global trade in the superchilled fuel, its chairman said.

The ships would be delivered from 2027 onwards, Wah Kwong's Executive Chairman Hing Chao told Reuters on the sidelines of the Singapore Maritime Week ShipZERO28 event late last week.

"We have always been very optimistic about the outlook of LNG as a global energy," said Chao, adding that a lot of supply will have to come from the U.S. or the Middle East following Russian supply disruptions, creating demand for more LNG carriers.

The ships ordered by Wah Kwong can burn conventional fuel oil as well as LNG which will lower their oil consumption and greenhouse gas emissions.

"That will prepare the company for the energy transition, putting us in a position to handle fuels like ammonia and even hydrogen in the future because a lot of the gas characteristics are similar," Chao said.

The shipper has also started adopting marine biofuel blends for bunker trials. It has not placed orders for methanol-fueled ships as the low-carbon methanol supply is limited, said Chao.

However, he added that China has the potential to become a key manufacturer of green fuels and this could in future draw some bunkering volumes away from the world's largest bunker hub Singapore.

China conducted its first ship-to-ship green methanol bunkering operation on a Maersk ship at Yangshan port on April 10. The bunkering vessel used in the operation was owned by Shanghai International Port Group and managed by Wah Kwong.

The company is also looking at a range of technical measures, including shaft generators, more energy-efficient generators, paint and carbon capture onboard ships, said Chao.

Wah Kwong has seven oil tankers and 28 bulk carriers, which are fully owned or chartered under long-term contracts. (Reporting by Jeslyn Lerh; Editing by Florence Tan and Eileen Soreng)