Global LNG export growth will continue to drive demand for new LNG carriers, says leading South Korean shipbuilder
Strong short-term demand for new LNG carriers is expected to lead to an additional 252 newbuild vessels joining the fleet by 2024, according to South Korea’s Samsung Heavy Industries.
Samsung Heavy Industries (SHI) revealed the projections in a Q1 2019 presentation to investors. It said its short-term estimates were based on global LNG export plans. Of those 252 LNG carriers, about 90 are currently in the order pipeline. Those orders are being driven by an initial 40 vessels required for Qatar Petroleum’s expansion plans for its North East field, 16 LNGCs for Anadarko’s Mozambique LNG, 10-15 ice-breaking LNGCs for Novatek’s Yamal LNG in Russia and 20 LNGCs for the start-up of ExxonMobil and QP’s Golden Pass LNG in Texas.
In the long-term, the shipbuilder sees demand averaging 50 vessels per year, 30-35 of which will be based on global LNG trade growth, 15-17 on the increase in tonne-mile requirements of moving LNG globally and four to five on replacing older tonnage.
With a US$380M contract to build two LNG carriers announced in June, SHI has secured orders for 11 vessels in 2019 – 10 LNG carriers and one floating production storage and offloading vessel, worth US$3Bn. With the surge in new orders this year, the South Korean shipbuilder now holds contracts to construct 34 LNG carriers, worth about US$6.1Bn. Overall, it has an orderbook of 90 vessels of various types worth US$22Bn.
In its backlog there are two floating LNG vessel projects, including the US$1.6Bn Petronas Rotan, 91% complete, and Coral FLNG, 12% finished. Petronas Rotan FLNG will be delivered to Malaysia in July 2020 and Coral FLNG to Mozambique in June 2022.
The wave of orders for new LNG carriers could help steady the ship at SHI. Despite showing a 7% increase quarter-on-quarter, and 17% increase year-on-year in revenue, SHI posted a loss for the quarter of US$28M.