Boxships conversion project launched.
Former top OOCL executive Ted Wang is one of the partners behind a scheme to convert containerships into semi-submersible heavylift vessels.
Eight ships of between 2,500 teu and 3,000 teu have already been identified as suitable candidates, with the purchase of four likely to be finalised within the next few weeks.
With secondhand prices so low at the moment, investors calculate that buying boxships and converting them is a relatively cheap way of entering this sector of the market that otherwise has high entry costs.
The initiative has been dubbed Project Hope ?because it provides hope for the containership industry?, said Mr Wang, who retired in 2005 after 34 years with the Hong Kong line.
He had been head of Orient Overseas Container Line"s European operations at the time of his retirement, but stayed on as a consultant and retains close links with his former company. Mr Wang is also president of California-based Friendship Transport.
The new project has attracted support from China, North America and Europe, according to Mr Wang, with some heavyweight Norwegian shipowners said to be taking a close interest. The recently-formed state-backed China Ship Fund, with Yuan50bn ($7.3bn) at its disposal for shipbuilding investments in both China and overseas, is expected to help bankroll the venture.
Investors have picked on the semi-submersible heavylift ship sector for several reasons, Mr Wang said during a visit in London this week. Requirements for such vessels are expected to increase in the years ahead in response to more offshore energy exploration and production in sites around the world. At the same time, older installations in the North Sea and Gulf of Mexico will have to be decommissioned. And yet, because of the high cost of such vessels, a shortage is anticipated unless some other way can be found of meeting demand.
Project Hope could be part of the answer, Mr Wang said.
Containerships appropriate for conversion must meet certain criteria, with the accommodation block at the stern in order to provide as large a deck area as possible. Those already singled out are between 10 and 15 years old, and are likely to be priced at around $7m apiece. Construction work, to be done in China, would come to another $18m or so, bringing the total cost to $25m per unit. That compares with a semi-submersible newbuilding that could be up to $80m.
But some newbuildings are now under construction in China, with Mr Wang revealing that 10 open-deck 50,000 dwt semi-submersible heavylift vessels, plus four open-stern 50,000 dwt and two 70,000 dwt open-stern units will be built over the next three years.
In contrast, the first of the containership conversions into open deck semi-submersibles could be completed by the end of this year, said Mr Wang.