Seaspan terminates deal for four LNG-powered newbuilds

Hong Kong-based containership owner Seaspan Corporation has canceled the contracts for four 7,700 TEU dual-fuel liquefied natural gas containership newbuildings.

The company said on Thursday that the decision was made as the counterparty failed to meet certain conditions in the contracts, hinting that legal action might be taken.

“Due to certain conditions in the contracts not being fulfilled by the counterparty, the contracts have become null and void. Seaspan has notified the relevant parties and has reserved its rights to claim against the counterparty in relation to the contracts,” the announcement from Seaspan reads.

Seaspan ordered the LNG-powered containerships back in May from an undisclosed shipyard. The vessels were scheduled for delivery in the third and fourth quarters of 2024. Upon completion, the quartet was earmarked to enter into long-term charters with a global liner company.

However, since the initial contract announcement Seaspan cautioned that the transaction was dependent on the closing of certain conditions.

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

The containership owner has been very diligent in making sure all of its newbuildings are delivered on schedule by working in close coordination with the shipyards to overcome logistical hurdles caused by COVID-19.

Last month, the company said that it had rejected force majeure notifications from four Chinese shipbuilders regarding the construction of newbuilding vessels citing the latest lockdowns in China caused by the COVID-19 pandemic.