BHP has signed contracts with COSCO Shipping Bulk Co., Ltd., a subsidiary of COSCO shipping Group (hereafter “COSCO Shipping”) for the charter of two ammonia dual-fuelled Newcastlemax bulk carriers.
The new vessels to be built under this arrangement will be two of only a handful of vessels in the world capable of using ammonia as a marine fuel.
The two vessels, expected to be delivered from 2028, will primarily transport iron ore from Western Australia to Northeast Asia.
When run on lower or low to zero greenhouse gas (GHG) emissions1 ammonia, these vessels will be capable of reducing GHG emissions by at least 50 per cent and up to 95 per cent on a per voyage basis compared to a conventionally fuelled voyage.
The five-year time charter contracts are expected to contribute towards a reduction in the GHG emissions intensity of BHP chartered shipping. This announcement represents an important step toward lowering GHG emissions in the iron ore seaborne market and moving the maritime sector towards a decarbonised future. It should also strengthen the demand for lower or low to zero GHG emissions marine fuels, which is important in the effort to scale up production of alternative fuels.
These contracts will also contribute to BHP’s commitment as part of the First Movers Coalition, that by 2030, 10 per cent of BHP’s total products shipped to its customers using the company’s time charter vessels will be shipped using zero GHG emissions fuels.
BHP selected COSCO Shipping following a rigorous expression of interest process, which evaluated safety, technical and commercial considerations.
BHP and COSCO Shipping have a longstanding relationship and will work closely together alongside key regulatory bodies to ensure the vessels are delivered and operated safely.
BHP continues to work with the maritime industry to develop an ammonia bunkering plan – the process of fuelling ships with ammonia – for the two vessels when they are delivered from 2028. Sourcing lower and low to zero GHG emissions ammonia is subject to an ongoing tender process.
The announcement is part of BHP’s efforts to establish demand and incentivise the industry to take up lower and low to zero GHG emissions fuels, building on the company’s current efforts including our charter of five dual-fuelled LNG vessels and the operationalisation of biodiesel as a marine fuel in the company’s commodity value chains.