Interest in green ammonia projects has been red-hot as investors and shipping companies wake up to the opportunities being created as part of the industry’s green transition.
That is according to Turner Holm, managing director of investment banking at Clarksons Securities, who told a conference on Wednesday that he has been inundated with interest for certain projects.
Holm said: “Shipping has had a reputation as being a bit callous and cold and uncaring.
“But I think if you look at the investment decisions that people are making around the energy transition, then it’s clearly part of the calculus,” he told YoungShip’s annual ShipCon conference in Oslo.
“I think you’re not going to get people to invest in, say, a brand-new tanker without some kind of dual-fuel possibility.”
Holm told conference attendees: “Just look at how fast the orderbook has grown for very large ammonia carriers (VLACs).
“It’s just a little niche segment in the gas space,” he said.
“But I think there’s been something like 45 orders for VLACs in the last 18 months.
“It went from nothing to just this huge orderbook and people coming in from all over the place.”
He said he thinks shipping companies and investors have caught on that shipping’s fuelling transition is coming and that climate change is a risk.
This means that new policy will force action in the future.
“Another example, we had this big tender recently that Clarksons was running for this neon project out in Saudi Arabia. There’s long-term contracts for ammonia carriers,” he said.
“I just got called by people all over the world wanting to participate in that, for carrying green ammonia.”
Clarksons Research currently shows 55 VLACs in the orderbook, all of which have been ordered since May 2023.
The vessels are fully-refrigerated gas carriers of over 65,000 cbm, able to carry ammonia at 98% of cargo capacity.
VLACs are capable of carrying both LPG and ammonia, which could mean that many will be employed on LPG trades until the global green/blue ammonia trade accelerates, according to Clarksons.
