India's SDHI inks LOI with Rederiet Stenersen for six hybrid propulsion tankers

India's Swan Defence and Heavy Industries has inked a letter of intent with European shipowner and operator Rederiet Stenersen AS for the construction of six hybrid, ice-class 1A ships designed for methanol or LNG conversion and battery upgrades.

"The LOI marks a defining moment for India's shipbuilding export, covering six vessels valued at approximately $220 million, with an option for an additional six ships to follow under the same class," SDHI said in a statement Nov. 10.

The six IMO Type II chemical tankers, each of 18,000 deadweight tonnage capacity, will be built at SDHI's facility in Pipavav, Gujarat. Deadweight tonnage is a measurement of the total contents of a ship including cargo, fuel, crew, passengers, food and ballast water.

Marinform AS, Norway, will design the ships, while DNV will class them, SDHI said.

The hybrid propulsion system featured in the ships will support operational modes with advanced automation for improved maneuverability, lower emissions and operational flexibility, it said.

"Each tanker has been conceived as future-ready -- the design allows conversion to methanol or LNG fuel and includes the provision to upgrade battery capacity up to 5,000-kWh, enabling significant improvements in green performance and adaptability for alternate fuels and technologies," SDHI said.

Rederiet Stenersen AS, established in 1974, owns and operates a fleet of 19 chemical/product tankers of 16,000-19,000 dwt, which primarily trade in Northern Europe, SDHI said.

The need for greener fuels has been gaining traction due to stricter impending environmental rules in international shipping.

In April, the International Maritime Organization's Marine Environment Protection Committee approved net-zero regulations for global shipping during its 83rd session. The framework represents the IMO's regulatory response to the 2023 IMO GHG Strategy to achieve net-zero greenhouse gas emissions by or around 2050.

A key extraordinary session of the IMO's MEPC in October, however, decided to delay the ratification of the framework, including the adoption of new requirements on GHG fuel intensity, in combination with a pricing and reward mechanism, for one year.

The monthly average delivered bunker price for 0.5% sulfur fuel oil, the most common bunker type, was $483.73/metric ton in Singapore in September, according to the bunker cost calculator from Platts, part of S&P Global Commodity Insights.

This average compares with $691.92/mtVLSFOe for B24 biobunker fuel with 24% used cooking oil methyl ester, $724.39/mtVLSFOe for gray methanol bunker, $959/mtVLSFOe for 20% sustainable methanol bunker and $1,897.44/mtVLSFOe for 100% sustainable methanol bunker.