Seaspan terminates agreement for four new builds fueled by LNG

Hong Kong-based container ship owner Seaspan Corporation has canceled contracts for four newbuilds of 7,700 TEU dual-fuel liquefied natural gas container ships.

The company said on Thursday that the decision was made because the counterparty failed to meet certain terms of the contracts, hinting that legal action could be taken.

“Due to certain terms of the contracts not being met by the counterparty, the contracts have become null and void. Seaspan has notified the affected parties and reserved its rights of claim against the counterparty in relation to the contracts.” Seaspan’s ad reads.

Seaspan ordered the LNG-powered container ships in May from an undisclosed shipyard. The vessels were due for delivery in the third and fourth quarters of 2024. Once completed, the quartet were to enter into long-term charters with a global liner company.

However, since the initial announcement of the contract, Seaspan has warned that the transaction is contingent on the closing of certain conditions.

Seaspan’s operating fleet consists of 127 vessels with a total capacity of 1.1 million TEUs and an additional 63 vessels under construction. With the latest termination of the contract, these now include 25 LNG-powered vessels.

The container ship owner has been very diligent in ensuring that all of its new buildings are delivered on time by working in close coordination with shipyards to overcome logistical hurdles caused by COVID-19.

Last month, the company said it had rejected force majeure notifications from four Chinese shipbuilders to build new ships, citing recent lockdowns in China caused by the COVID-19 pandemic.

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