Chevron Shipping Company and MOL to Install Wind Challenger on LNG Carrier

Rhea-AI Summary

Chevron Shipping Company and Mitsui O.S.K. Lines (MOL) have agreed to install the Wind Challenger, a hard sail wind-assisted propulsion system, on a new LNG carrier. This marks the world's first LNG carrier equipped with such a system. The vessel, under construction at Hanwha Ocean's Geoje Shipyard, is scheduled for delivery in 2026.

The Wind Challenger system, developed by MOL and Oshima Shipbuilding, aims to reduce fuel consumption and GHG emissions using telescopic sails. The installation is designed to minimize impact on existing LNG carrier designs and maintain ship-shore compatibility. This collaboration represents a significant step towards reducing carbon intensity in the LNG fleet and aligns with MOL's goal of achieving net-zero emissions by 2050.

Positive

• First-ever installation of Wind Challenger on an LNG carrier, potentially leading to significant fuel savings and emissions reduction
• Scheduled delivery of the innovative vessel in 2026, demonstrating near-term implementation of green technology
• Design minimizes impact on existing LNG carrier layouts, ensuring continued operational efficiency and compatibility
• Aligns with long-term environmental goals, potentially improving company sustainability profiles

Negative

• Potential increased upfront costs for vessel construction and Wind Challenger system installation
• Possible operational challenges in adapting to new wind-assisted propulsion technology
• immediate impact as only one vessel announced, with broader fleet implementation timeline unclear

Insights

Maritime Technology Expert

The installation of Wind Challenger on an LNG carrier marks a significant milestone in sustainable shipping. This wind-assisted propulsion system could potentially reduce fuel consumption and GHG emissions in the hard-to-abate maritime sector. The technology's design, which includes telescopic sails and safety measures like an enclosed bridge, demonstrates a thoughtful approach to integrating renewable energy into existing vessel designs.

The system's minimal impact on ship-shore compatibility and effect on windage area are important for maintaining operational efficiency. This innovation could pave the way for wider adoption in the LNG shipping industry, potentially leading to substantial long-term cost savings and environmental benefits. However, the real-world performance and return on investment will need to be closely monitored to determine the technology's true impact on the industry.

Environmental Policy Analyst

This collaboration between Chevron and MOL represents a notable step towards decarbonizing the LNG supply chain. The maritime sector, particularly LNG shipping, has been under pressure to reduce its carbon footprint. By implementing Wind Challenger, these companies are demonstrating proactive measures to align with global climate goals.

The project aligns with MOL's 'Environmental Vision 2.2' and the broader industry trend towards net-zero emissions by 2050. However, it's important to note that while this technology reduces emissions, it doesn't eliminate them entirely. The true environmental impact will depend on factors such as route optimization, wind conditions and integration with other green technologies. This initiative could potentially influence policy discussions and encourage further innovation in sustainable shipping practices across the industry.

Financial Analyst

From a financial perspective, this investment in Wind Challenger technology represents a strategic long-term bet on sustainable shipping. While the initial costs of implementing this technology are likely significant, the potential for reduced fuel consumption could lead to substantial operational cost savings over time, especially given the volatility of fuel prices.

For Chevron and MOL, this initiative could enhance their competitive position in an increasingly environmentally conscious market. It may also help them mitigate future regulatory risks related to emissions. However, investors should consider the scalability of this technology and its impact on overall fleet performance. The success of this project could influence future capital allocation decisions and potentially reshape the economics of LNG shipping. It's important to monitor the performance metrics and cost-benefit analysis once the vessel is operational in 2026.

Wind-Assisted Ship Propulsion System is an LNG Shipping First

SAN RAMON, Calif. & TOKYO--(BUSINESS WIRE)-- As part of their ongoing commitment to lower the carbon intensity of their operations, Chevron Shipping Company LLC (Chevron), a subsidiary of Chevron U.S.A. Inc., and Mitsui O.S.K. Lines, Ltd. (MOL) announced an agreement to install Wind Challenger, a hard sail wind-assisted ship propulsion system developed by MOL and Oshima Shipbuilding together (Note 1), to a new build LNG carrier under long term charter from MOL Encean Pte. Ltd. (MOL’s 100% indirectly owned subsidiary) to Chevron Asia Pacific Shipping Pte. Ltd. This vessel will mark the world’s first LNG carrier equipped with Wind-Assisted Ship Propulsion Systems.

The Wind Challenger equipped LNG carrier (Photo: Business Wire)

The vessel is under construction at the Geoje Shipyard of Hanwha Ocean Co., Ltd. and is scheduled for delivery in 2026. In August 2024, MOL obtained an approval in principle (AiP) by Nippon Kaiji Kyokai (Class NK) – a first for an LNG carrier with a Wind-Assisted Ship Propulsion System (Note 2). The Chevron chartered vessel will be the first application.

Wind Challenger will help reduce fuel consumption and GHG emissions by using its unique telescopic sails.

In addition to the robust design of Wind Challenger itself, additional safety measures include a fully enclosed navigation bridge and a lookout station on the vessel’s fore deck to further enhance visibility.

For tradability, the installation position of the Wind Challenger aims to minimize impact on the existing design of membrane type LNG Carriers. It will enable the retention of the existing mooring arrangement unchanged and thereby minimize impacts on ship shore compatibility, together with limited impact on the vessel’s windage area.

“We’re proud to partner with MOL in Wind Challenger’s industry-first LNG installation,” said Barbara Pickering, President of Chevron Shipping Company. “This is another example of using novel approaches in hard-to-abate sectors to reduce carbon intensity in our LNG fleet.”

Takeshi Hashimoto, President, and CEO of Mitsui O.S.K. Lines, said, “With the understanding and cooperation of Chevron, we are delighted to be able to expand the Wind Challenger Project to LNG carriers in addition to the two delivered Wind Challenger-equipped bulkers (Note 3) and other ongoing projects (Note 4). Achieving GHG reduction in the maritime transport of LNG, which is increasingly in demand worldwide as a transition fuel, is a very important mission for us. This project will undoubtedly be a significant milestone towards achieving 'net-zero emissions by 2050', a medium to long-term goal of the Mitsui O.S.K. Lines Group, as stated in our 'Environmental Vision 2.2'.”

The Wind Challenger technology will be on exhibit at the MOL booth at the Gastech Exhibition & Conference 2024 in Houston, September 17-20. Information sessions on how the technology can be applied to both LNG carriers and other vessels will also be held.

＜Vessel Outline＞

Ship Owner	MOL Encean Pte. Ltd.
LOA / Breadth	About 286 m / About 46 m
Cargo Tank Capacity	About 174,000 m3
Shipyard	Hanwha Ocean Co., Ltd.
Wind Challenger Specifications	Number of Sail: 2 Height: Up to 49 m (3-tier) Width: About 15 m Sail material: Fiber Reinforced Plastic

(Note 1) For details, please refer to the following web site.
Wind Challenger: The Wind Assisted Ship Propulsion System | SERVICES | Mitsui O.S.K. Lines, Ltd. Solutions (mol-service.com)
(Note 2) For details, please refer to the following press release.
MOL Obtains AiP for "LNG Carrier Installing Wind Challenger" - The World's First Approval for an LNG Carrier - | Mitsui O.S.K. Lines
(Note 3) For details, please refer to the following press releases.
Delivery of SHOFU MARU, World's First Cargo Vessel equipped with 'Wind Challenger' Hard Sail | Mitsui O.S.K. Lines
MOL Announces Delivery of Bulk Carrier Green Winds, 2nd Vessel Equipped with Wind Challenger Hard Sail Propulsion System | Mitsui O.S.K. Lines
(Note 4) For details, please refer to the following press releases.
Wind Challenger to be Installed on Coal Carrier for J-Power - World's 1st Retrofit on an In-service Vessel - | Mitsui O.S.K. Lines
Wind Propulsion Systems will be Installed on 7 Vessels Operated by MOL Drybulk - Steadily Pursuing to '25 Wind Challenger-equipped Vessels' by 2030 - | Mitsui O.S.K. Lines

About Chevron:

Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. More information about Chevron is available at www.chevron.com.

About MOL:

MOL is a leading shipping company, operating on a global scale with more than 800 vessels in service. The company develops various social infrastructure businesses centered on ocean shipping, as well as technologies and services to meet ever-changing social needs including environmental protection. The MOL fleet includes dry cargo ships, liquefied natural gas (LNG) carriers, car carriers, and tankers. In addition to the traditional shipping businesses, MOL also offers wellbeing & lifestyle businesses such as real property, terminal operation, and ferry service, as well as social infrastructure businesses such as logistics and offshore wind power. With one of the largest merchant fleets and about 140 years of history, experience, and technology, MOL will make a leap forward to become a global social infrastructure company, support people's daily lives from the blue ocean, open the way to a prosperous future, and deliver new value to all stakeholders.
Website: https://www.mol.co.jp/en/

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Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240913468521/en/

Christine Dobbyn

External Affairs Advisor, Chevron

Tel: +1 281-906-1499

christinedobbyn@chevron.com

Mitsui O.S.K. Lines, Ltd.

Corporate Communications Division, Media Relations Team

E-mail: mrtmo@molgroup.com/TEL: 03-3587-7015

Source: Chevron Corporation

FAQ

What is the Wind Challenger system being installed on Chevron's LNG carrier?

The Wind Challenger is a hard sail wind-assisted ship propulsion system developed by MOL and Oshima Shipbuilding. It uses telescopic sails to reduce fuel consumption and greenhouse gas emissions on ships.

When is the Wind Challenger-equipped LNG carrier for Chevron (CVX) expected to be delivered?

The LNG carrier equipped with the Wind Challenger system is scheduled for delivery in 2026. It is currently under construction at the Geoje Shipyard of Hanwha Ocean Co.,

How does the Wind Challenger installation impact the design of Chevron's (CVX) LNG carrier?

The Wind Challenger installation is designed to minimize impact on existing LNG carrier designs. It retains the existing mooring arrangement and has impact on the vessel's windage area, ensuring ship-shore compatibility.

What are the environmental benefits of the Wind Challenger system for Chevron's (CVX) LNG fleet?

The Wind Challenger system aims to reduce fuel consumption and greenhouse gas emissions in Chevron's LNG fleet. This aligns with the company's efforts to lower the carbon intensity of their operations in hard-to-abate sectors like maritime transport.