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6 LNG vessels order is coming! The first "showdown" between Chinese and Korean shipping companies in 2021

6 LNG vessels order is coming! The first "showdown" between Chinese and Korean shipping companies in 2021

Column:Industry News    Date:2021/1/25 13:25:22    Viewed:

In the past 2020, South Korean shipbuilders narrowly defeated China by virtue of the "backward momentum" of LNG ship orders. In 2021, the "showdown" between Chinese and Korean shipbuilders will begin again, and LNG vessels will once again be the "winner" in the battle for orders.


According to recent reports in the South Korean media, Petronas is considering ordering up to six LNG vessels, and has been discussing which shipyard to eventually build them. The list of candidate builders has been narrowed down to South Korea's Hyundai Heavy Industries Group and China's Hudong-Zhonghua Shipbuilding (Group) Co. The final showdown between Hudong-Zhonghua and Hyundai Heavy Industries Group is a matter of concern as to who will win.


It is reported that the batch of LNG vessels to be ordered by Malaysian oil companies will be used for the first phase of the $40 billion Canadian LNG project led by Royal Dutch Shell (Shell), including three official construction orders and three option orders. The specifications of the vessels are not yet publicly available, but the first three formal orders are expected to be delivered in 2024.


PETRONAS owns a 25% stake in an LNG project in the Kitimat region of Canada. Located in northern British Columbia, Canada, the project is planned to be the largest landmark LNG project in Canada to date, with four production lines capable of producing 28 million tonnes of LNG per year. It will also be the world's lowest CO2-emitting large-scale LNG facility to date. This is the reason why Malaysia's Petronas is actively ordering LNG vessels.


South Korean industry sources said it is expected that the order for the 3+3 LNG vessels will have to wait for some time until they are finalized. It is reported that since September last year, Malaysian National Oil Company has been investigating for the selected construction company, however, as the three major Korean shipbuilding companies Hyundai Heavy Industries Group, Daewoo Shipbuilding, Samsung Heavy Industries signed a letter of intent (LOI) with Qatar National Petroleum Company (QP) in June last year for the construction of 100 LNG vessels in scale, it is expected that from this year until 2024, there will be 20~30 LNG carriers per year. 30 LNG carriers orders in batches, and Hyundai Heavy Industries Group's ship space is actually not abundant, so the Malaysian national oil company's orders will take some time to finalize.


A total of 49 large LNG vessels of over 140,000 cubic meters were sold in the global shipbuilding market last year, of which Korean shipbuilders grabbed 36 vessels with their strong competitiveness, accounting for 73% of the total. Regarding the brief increase in orders since the end of last year, the Korean industry speculates that the momentum is likely to continue, especially when LNG projects in Qatar, Mozambique and Russia, which were postponed due to the New Crown epidemic, restart, and orders for LNG vessels will follow.


The Korean shipbuilding industry has high hopes for large orders for LNG vessel projects in 2021. With each large LNG vessel costing up to about US$200 million, the performance of the Korean shipbuilding industry is more influenced by the large LNG fleet, which is a high value-added vessel, compared to ship types such as oil tankers and container ships.


The Korean shipbuilding industry has swept the global LNG ship market for several years with its unique technological competitiveness. Relying on its huge advantage in the field of LNG ship construction, the Korean shipbuilding industry has maintained the world's top position in new ship orders for three consecutive years from 2018 to 2020, achieving a de facto monopoly in the LNG carrier construction market.


Industry insiders said that with the increase in LNG demand worldwide, the increase in LNG vessels and the alternation between old and new is inevitable, and Korean shipbuilders are adapting to such changes in demand and restoring their competitiveness, and considering the current undersupply phenomenon in the global LNG market, the number of LNG vessel orders in the next 10 years may exceed that of the past 30 years.


A South Korean industry insider also said that whether the South Korean shipbuilding industry can achieve the "four consecutive championship" of receiving orders depends on whether the forecasted new LNG ship orders are actually in place. With the release of LNG ship orders, the South Korean shipbuilding industry is unanimous that South Korea's "road to keep the business" of occupying the first place in the global shipbuilding industry for four consecutive years is promising.


A South Korean industry insider said: "We expect that in 2021, Korean shipbuilders will receive 600 orders, accounting for more than 50% of the global market share. The market dominance of the Korean shipbuilding industry will be further strengthened."

  
  
  
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