Israeli container shipping company ZIM Integrated Shipping Services Ltd announced on Wednesday that it has exercised its option to long-term charter five additional 7,000 TEU liquefied natural gas (LNG) dual-fuel newbuilds from containership lessor Seaspan Corporation.

Under the initial deal announced in July, ZIM has already entered into long-term charter agreements for ten 7,000 TEU LNG vessels scheduled to be delivered from the fourth quarter of 2023 into 2024. The option announced today, which ZIM revealed to be worth more than $750 million, brings the total number of vessels chartered under this transaction to 15.

“With this option exercise, we are securing ZIM’s core fleet needed to serve our operations and meet our customers’ growing needs, while continuing to maintain our operational agility, said Eli Glickman, ZIM president and CEO. “This transaction demonstrates our deep commitment to the environment and to reducing our carbon footprint. We continue to invest the resources necessary to be an industry leader and to prepare ourselves for the cleaner future of our industry.”

Seaspan said it will strike a deal with a “major shipyard” to construct the five additional containerships for an aggregate purchase price near $530 million. Due for delivery during the fourth quarter of 2024, the five vessels will operate on 12-year minimum charters totaling approximately $900 million of gross contracted cash flow, Seaspan said.

Bing Chen, chairman, president and CEO of Seaspan, said, “We continue to create value for our customers through differentiated services, operational excellence and the ability to implement solutions tailored to our customers’ changing requirements. The exercise of this option, with valuable vessel deliveries at competitive pricing, highlights the continued quality growth for both companies. The advanced design of these vessels demonstrates Seaspan and ZIM’s leadership in ESG initiatives and a more sustainable industry. With strong customer interest in this vessel size, we consider this category to be the natural successor to the aging global fleet of conventional vessels between 4,000 and 9,000 TEU.”

Seaspan, a wholly owned subsidiary of Atlas Corp., has grown its fleet dramatically over recent months amid continued high demand and vessel shortages in the container shipping sector. Since December 2020, the company has announced 60 newbuild orders for vessels ranging from 7,000 TEU to 24,000 TEU in addition to four secondhand vessel acquisitions.

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