BHP charts a course with ammonia

BHP has signed contracts with COSCO Shipping Bulk 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 WA to Northeast Asia.

When run on lower or low to zero greenhouse gas (GHG) emissions ammonia, these vessels will be capable of reducing GHG emissions by at least 50% and up to 95% 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.

BHP maritime and supply chain excellence vice president Emma Roberts says this is an exciting moment for the company, COSCO Shipping and the maritime sector.

“Together we are contributing to the industry’s ambition towards abatement of maritime greenhouse gas emissions through these first generation ammonia dual-fuelled vessels,” she said.

“We believe this investment will help to build momentum in the technology, strengthen the demand for ammonia as a marine fuel and support the reduction of greenhouse emissions in the maritime value chain.

“As one of the world’s largest dry bulk charterers, BHP sees this as an opportunity to help establish a pathway for ammonia to be a marine fuel for a globally significant industry where emissions can be difficult to abate.

“Our tender process for the design and charter of ammonia dual-fuelled bulk carriers has brought together shipowners, fuel suppliers, engine-makers and regulatory bodies from around the world.”

These contracts will contribute to BHP’s commitment as part of the First Movers Coalition, that by 2030, 10% 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.

COSCO Shipping vice president Ji Lin says the partnership with BHP has developed for many years.

“[The partnership has] been shaped by openness, reliability and a joint pursuit of innovation,” he said.

“Together, we’ve worked through challenges, strengthened supply chain excellence and taken meaningful steps towards transition to net zero.

“The contracts we are signing today — for two 210K DWT ammonia dual-fuel bulk carriers — are part of more than just a project to enable alternative marine fuels.

“It’s a symbol of how our collaboration is evolving with the times. It also reflects the real progress being made to the ‘Australia–China Green Shipping Corridor’.

“Ammonia is one of the most promising marine fuels with zero-carbon potential.

“These vessels will stand at the forefront of technological and environmental advancement — not just for COSCO Shipping and BHP, but for the broader dry bulk sector. They represent a firm commitment to supporting the global climate and Chinese dual-carbon goal.

“Looking ahead, COSCO Shipping will continue to work closely with BHP to help accelerate the transition to net-zero shipping, scale up innovation, and help shape a more sustainable and resilient global supply chain.”

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.