Concordia Maritime: Tanker to containership conversion project put on hold

Swedish tanker shipping company Concordia Maritime has decided to put on hold the project that has been exploring the feasibility of converting a tanker into a containership.

“The technical study shows that it is technically feasible to convert P-MAX vessels into 2,100 TEU container vessels, but the increasing economic uncertainty has made it difficult to reach an agreement with an end customer,” the company informed.

To remind, in February 2022, Concordia Maritime launched a technical design study to convert and adapt a P-MAX vessel for container transportation. The study has been conducted with Stena Teknik  — a technical resource for Stena’s marine-related business areas — and a German consulting company specialising in ship design.

The decision was likely prompted by the weak tanker market on the one hand and the strong container market, on the other hand, caused by the disruption in the global logistics value chain.

However, the tanker market, especially the product tanker segment, developed positively during the second quarter of this year.

The company’s result finally returned to profit, which amounted to SEK 35.7 million ($3.4 million) — compared to SEK –89.7 million seen in the corresponding period a year earlier — and is a significant improvement from 12 months ago.

When it comes to the market outlook, two factors could have a major impact on future development, according to Erik Lewenhaupt, CEO of Concordia Maritime. These are energy security and demand destruction. Achieving sufficient crude oil and gas production to ensure access to energy could have a positive effect on the tanker market. At the same time, we are likely to enter an international economic downturn. The extent to which a significant slowdown in economic growth – and high energy prices – will contribute to demand destruction in terms of energy demand and energy-related transport remains to be seen, Lewenhaupt concluded.

Concordia Maritime getting ready for new environmental regulations

Concordia Maritime said it monitors developments regarding shipping regulations issued by the International Maritime Organization (IMO), the European Union (EU) and other relevant bodies.

The IMO’s short-term greenhouse gas reduction measures are likely to require fleet adaptations in the coming years, according to the company.

The IMO’s EEXI and CII regulations enter into force in 2023 and an evaluation of effective technical and operational initiatives required to ensure compliance is underway.

In order to comply with the EEXI regulations, Concordia Maritime plans to install engine power limitation on the P-MAX vessels during 2023. In short, this enables a vessel to limit its maximum engine power, which is not expected to have any negative operational impact. The investment is expected to amount to approximately $35,000 per vessel, the shipping company revealed.

Concordia Maritime currently has seven 65,200 dwt P-MAX tanker vessels, following the recent sale of Stena Paris, its oldest ship.