Danish owner J Lauritzen has signed a letter of intent to build at least two methanol dual-fuelled kamsarmax bulk carriers in Japan, backed by long-term time charters to Cargill.

The 81,200-dwt kamsarmaxes will be built by Tsuneishi Shipbuilding and will commence minimum seven-year time charters to Cargill when they are delivered in 2026.

“We are very happy with this transaction, as it is important for J Lauritzen and Lauritzen Bulkers to participate actively in the decarbonisation of the shipping industry, and we are proud to be able to do so in a visionary partnership with Cargill, who are sharing our ambition to truly drive change in our industry,” J Lauritzen’s CEO Kristian Morch said in a release on Monday.

The ships will be able to trade with zero-carbon emissions when powered by green methanol and biodiesel.

Morch told TradeWinds the bulkers will be fitted with MAN B&W dual-fuel engines that can switch seamlessly between very low-sulphur fuel oil and alternative fuels.

Jan Dieleman, Cargill’s president of Ocean Transportation, said he was looking forward to partnering with J Lauritzen to “help move the industry forward in the zero-carbon fuel space”.

“It is great to see reputable companies like J Lauritzen joining the decarbonisation journey with such a bold step,” Dieleman said.

The duo will be owned by a new company called Lauritzen NexGen Shipping, which J Lauritzen and Lauritzen Bulkers said they intend to use as a platform for further investments in zero-carbon and future-proof assets for shipping.

The joint venture between J Lauritzen and Cargill has been facilitated by Copenhagen Commercial Platform (CCP), which is led by long-time dry cargo specialist Christian Bonfils.

CCP will be involved in operating and further developing the joint venture, the companies said, without giving further details.

A computer-generated image of the methanol-fuelled kamsarmax ordered by J Lauritzen at Tsuneishi Shipbuilding in Japan. Photo: J Lauritzen

First movers in methanol

TradeWinds reported in October that Cargill was in talks with three or four parties for methanol-fuelled bulk carriers after launching a tender for proposals a few months earlier for four to six ships.

This was followed by news in January that Cargill and Japanese owner Mitsui & Co had together placed the first-ever order for two methanol dual-fuelled bulkers.

Data from Clarksons shows the two ships are scheduled for delivery in late 2024 and early 2026 respectively.

Tsuneishi won another order for a methanol dual-fuelled ultramax bulker in February, which will hit the water in 2025. The owner behind the order has not been disclosed.

A small but growing number of shipping companies, led by Danish container shipping giant AP Moller-Maersk, have now booked newbuildings fuelled by methanol.

Data compiled by classification society DNV shows that 80 methanol-fuelled newbuildings are on order for delivery dates through into 2028. Three of these vessels are bulkers, excluding the two Lauritzen vessels.

Clarksons puts the methanol-ready orderbook slightly higher at 96 vessels.

Last week saw new orders for the first methanol-capable car carriers, a series of methanol bunkering tankers and four methanol-ready chemical tankers.

“Green” methanol — made from either sustainable biomass or a combination of green hydrogen and captured carbon — is an ultra-low carbon marine fuel option for vessels, but securing a sufficient supply of the fuel is a hurdle that will need to be tackled before widespread commercial adoption is possible.