COVID-19 has delayed Hapag Lloyd’s plans to retrofit one of its 15,000TEU container ships to use LNG fuel, the operator’s director of global fuel purchasing, Finn Fuelbier, revealed last week.
Sajir will be the first large container ship to be modified for gas fuel and is one of 17 ships in Hapag Lloyd’s fleet that were contracted by UASC – with which Hapag Lloyd merged in 2016 – to be LNG-ready. When the work is complete, its HFO-burning MAN B&W 9S90ME-C will be redesignated as its dual-fuel ME-GI equivalent, able to run on HFO and LNG, the engine maker said when the plan was announced last year.
Hapag Lloyd plans to use both LNG and low-sulphur fuel oil in the engine and work should have now started on the three-month task. But “the project has been set back a little due to COVID-19,” Mr Fuelbier said, in particular by dock closures in Asia, where the engine retrofitting has been contracted to MAN Energy Solutions licensee Hudong Zhonghua Shipbuilding and the conversion work to Shanghai’s Huaran Dadong Dockyard.
Because of the delay, “we’re currently looking at getting the vessel into the dock and finishing the retrofitting around late Q1 or Q2 in 2021,” he said.
He was speaking during a webinar last week (7 July) titled ‘Shipping in the eye of the storm’, hosted jointly by Inatech – which provides fuel management software for shipping and ETRM systems for the bunkering and oil trading community – and the analyst S&P Global Platts.
He made his remarks during the webinar’s Q&A period but during a conversation earlier in the webinar with Capt Alok Sharma, Inatech’s senior vice president, he had described some other effects that the pandemic has had on Hapag Lloyd.
Being a global operator, it saw COVID-19’s impact spread from China into Europe and on to the US and now, “the pandemic is at full speed in Latin America,” he said. In line with the whole container sector, demand dropped and the effects were seen in its Q2 volumes, which are down by around 10 to 15% compared with the same period last year.
Some services were temporarily discontinued which “made it challenging for us in bunker procurement.” He paid tribute to his bunker suppliers, saying that the “great cooperation” they had provided showed the value of Hapag Lloyd’s policy of being “close to our counterparty suppliers in a strategic partnership” which had proved “quite successful during these times.”
He described some practical difficulties his department had faced as a result of the pandemic, in particular relating to bunkering procedures in ports where the authorities do not allow surveyors to board foreign vessels making what had previously been common practice “a great challenge under pandemic lockdowns.” In some ports, surveyors are allowed to board the barge, but not the ship.
This has made it difficult, for example, to obtain the measurements and test samples that are essential to managing a bunker stem. One solution has been to delegate some of the survey procedures to the crew “and that worked out pretty well,” Mr Fuelbier said, but in some ports, “we had to leave out surveys altogether.”
With the pandemic idling a number of ships, Hapag Lloyd has taken the opportunity to review its bunkering arrangements, for example by scheduling bunkers-only calls at ports where there would not normally be time to conduct that task. This has given an opportunity to reduce bunker costs to a minimum, Mr Fuelbier said. For its operational fleet, “our standard bunker strategies became obsolete at one point,” he said, as his bunker department tracked price developments in the areas where the pandemic was spreading on a daily basis. “This is a major task,” he added.
“Looking ahead,according to the most recent figures of market research institutes volumes will decline around 10 percent in 2020 and we do not expect to be far from the market.” However, he echoed the webinar’s title, saying “Let’s not forget we are still in the middle of the storm.”