Exmar JV contracts to build world's first ammonia-fueled LPG carriers

Exmar LPG has placed the world's first order for ammonia-capable marine engines that will be installed on two of its mid-sized LPG carriers under construction in South Korea, the company said Oct. 16, paving the way to become a pioneer for the low-carbon fuel.

While industry participants have talked of ammonia being a future marine fuel for years due to its strong decarbonization potential, the 50:50 joint venture between Belgian gas shipping firm Exmar and Stonepeak-backed Seapeak is the first to sign a firm contract to build ammonia-fueled ships.

Exmar LPG had placed newbuild orders for four 46,000 cu m vessels at Hyundi Mipo Dockyard, and the company confirmed that two of them would be installed with WinGD's dual-fuel engines designed to operate on ammonia and conventional oil-based fuels as well as Wartsila's fuel supply system.

"Ammonia is set to become a mainstream sustainable marine fuel and energy carrier by mid-century, and we are delighted to be working with Exmar to ensure that the vessels carrying the cargo will be among the first to use it," WinGD director of sales Volkmar Galke said in a statement.

Many analysts, including those at S&P Global Commodity Insights, have anticipated that ammonia might become the most common type of low-carbon marine fuel by 2050 due to fewer obstacles in scaling up its production.

Assuming accelerated decarbonization efforts by governments and businesses, S&P Global expects ammonia to make up 38% of low-carbon bunker supplies in 2050 versus methanol at 30%.

Finding the fuel

When delivered in early 2026, the Exmar LPG ships will be able to transport ammonia as well as other types of LPG and directly use the ammonia it carries as bunker fuel when opportunities arise, according to the company.

Carl-Antoine Saverys, deputy director of shipping at Exmar, told S&P Global that Exmar LPG was in talks with low-carbon ammonia producers to time charter the ships for their transport requirements and provide ammonia as bunker fuel.

The shipowner does not intend to burn fossil ammonia, which dominates the current global supply and has few decarbonization effects, but is cheaper than "green ammonia" generated from renewable hydrogen and blue ammonia produced with carbon capture and storage technology.

While green ammonia is expected to remain expensive for some periods, blue ammonia could become commercially competitive with the US Inflation Reduction Act subsidizing CCS, Saverys said.

Platts, part of S&P Global, assessed fossil ammonia at $580/mt on a C&F US Gulf Coast basis Oct. 13, and that blue ammonia would cost $23.65/mt more.

Exmar has collaborated with Saudi miner Ma'aden and Canadian fertilizer maker Nutrien on low-carbon ammonia transport projects, and Saverys suggested the two are potential business partners for the ammonia-capable ships.

However, ammonia is highly toxic and corrosive, and the International Maritime Organization is still developing the interim safety guidelines for ammonia-powered vessels.

"Throughout the design and development phase of the vessels, meticulous attention has been given to operational safety when introducing a toxic substance into the engine room," Exmar LPG said in the statement, adding that the company has worked with Lloyds Register and flag state Belgium to address the concerns.