In this episode of the Capital Link Trending News Webinar Series, Mads Peter Zacho, CEO of Navigator Gas NVGS, discussed how the company has taken a bold step toward decarbonization by announcing the construction of its first gas carriers powered by ammonia. Mr. Zacho revealed details of a joint venture with Amon Maritime to build two dual fueled 51,500-cubic-meter vessels capable of running on clean ammonia, while also retaining traditional fuel options.
Each ship will cost approximately $84 million. The vessels will be the largest in Navigator's fleet to date, offering greater cargo economies of scale on a per-ton basis and improved fuel efficiency.
Mr. Zacho highlighted that these strategic fleet investments align with regulatory momentum, including the EU ETS (European Union Emissions Trading System), FuelEU Maritime, and the expected IMO Net Zero Framework, all of which will increase the commercial attractiveness of clean fuels like ammonia starting as early as 2030.
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Navigator Gas Explores a Future in Ammonia
The Case for Clean Ammonia as Marine Fuel
Clean ammonia has emerged as a frontrunner in the race to decarbonize shipping. Its zero-carbon combustion properties, combined with an existing global production infrastructure originally developed for fertilizer, make it well-suited for adoption as marine fuel. Unlike traditional marine fuels, clean ammonia emits no CO₂ when burned -- producing only nitrogen and water as byproducts.
According to Mr. Zacho, clean ammonia's scalability -- whether produced through renewable hydrogen or carbon-captured natural gas -- makes it a practical long-term solution. He believes that by 2030, clean ammonia will be cost-competitive with conventional fuels, especially as emissions regulations tighten. An early investment in ammonia propulsion technology ensures that the company is well prepared for this transition.
Mr. Zacho noted, "Expanding our fleet with two modern ammonia carriers capable of using clean ammonia as a fuel, operating in a long-term time charter, is a strategic enabler in meeting the growing demand for a sustainable fuel source in a net-zero economy."
Partnering with Amon Maritime
Amon Maritime, a Norwegian maritime project developer, secured for these two ships a 180 million Norwegian kroner (approximately $18 million) grant from Enova, a Norwegian government agency supporting clean energy initiatives. This funding will help offset the higher upfront costs associated with ammonia propulsion technology, making a project like this economically viable. The joint venture expects to finance the majority of the project through commercial bank debt, with the remaining amount coming from capital contributions from both Navigator and Amon Maritime. Navigator expects to fund its portion from available cash resources, and these investments are expected to be accretive to the Company's earnings.
Commercial Viability of the Project
Navigator Gas has already secured a five-year charter agreement for the new vessels with a blue-chip counterparty, although details remain confidential. Mr. Zacho states that the combination of competitive newbuilding costs (the ships will be constructed by SinoPacific in China), favorable financing, and the Norwegian government grant makes these ships highly accretive to earnings. Environmentally, the ships are expected to reduce CO₂ emissions by approximately 80-90% compared to conventional fuels. He further noted that the risk-reward profile of the deal is highly attractive for both Navigator and the charterer, particularly as regulatory pressures grow and clean ammonia's cost competitiveness improves.
Newbuilding Program Enhances NVGS's Competitive Positioning
In addition to these two vessels, Navigator Gas is further expanding its fleet with four 48,500 cbm midsize carriers. These newbuilds, equipped with dual-fuel engines capable of operating on ethane or conventional marine fuels and retrofit-ready for ammonia, are designed to enhance the company's competitive position in the global ethylene and LPG transportation markets. Dual-fuel capability and ammonia readiness support Navigator's path to lower emissions and alignment with future maritime fuel standards.
Strategically, these vessels also complement the company's 50% joint venture at the Morgan's Point ethylene export terminal in Texas, effectively serving as a "floating pipeline" to key global markets.
Once delivered, all six newbuilds are expected to outperform the earnings contribution of Navigator's existing fleet, according to Mr. Zacho, reinforcing their long-term financial and operational value.
New Cargo Operations with Babcock
In another move, Navigator Gas has partnered with Babcock International Group to develop technology that allows for rapid switching between ammonia and LPG cargoes. Traditionally, gas carriers are optimized for one cargo type, and switching between types usually requires time-consuming and costly cleaning processes.
This new system will allow ships to carry ammonia on one leg of a voyage and LPG on another -- reducing vessel downtime, minimizing ballast legs, improving operational efficiency, and lowering emissions. The engineering phase is nearing completion, with commercial deployment expected soon. The solution is also expected to appeal to customers seeking flexible transport options amid shifting global energy flows.
Disclosure: Capital Link is the investor relations advisor to Navgiator Gas. This content is for informational purposes only and not intended to be investing advice. We would like to highlight that this is not a Capital Link article with our own editorial on the company. It is a CEO interview. Thus, all comments in the article are the CEO's.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.
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