The domestic shipbuilding industry is screaming for joy over a recent surge in orders for liquefied natural gas (LNG) carriers.
Currently, the Big 3 Korean shipbuilders -- Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries – each have a backlog of more than 30 vessels. In light of the time required to build LNG carriers, the Korean shipbuilders have secured work to do until 2022. The Korean shipbuilders are hoping to further expand their order book as the Qatar government is expected to place a big order for LNG carriers before long.
DSME had orders for 37 LNG carriers as of April 29, the largest among the shipbuilding trio. It is followed by 36 vessels for Hyundai Heavy Industries Group and 30 units for Samsung Heavy Industries. As it usually takes around two and a half years to build an LNG tanker, the three have shipbuilding work to do until 2022.
The Korean shipbuilders are encouraged by Qatar’s move to expand its LNG processing facilities. Qatar's state-run oil company has begun a bidding process for an engineering, procurement and construction (EPC) package to ramp up LNG production in its northern region. The bidding results will be announced at the beginning of next year.
Qatar's state-run oil company will order a total of seven projects -- four liquefaction plants and three cargo and piping facilities. When all of the construction work is completed, Qatar will be able to export an additional 31.2 million tons of LNG a year. This volume accounts for about 40 percent of Qatar's current processing capacity. In Korea, Hyundai Engineering & Construction (E&C) and Daewoo Engineering & Construction (E&C) are seeking to win these orders.
Along with the expansion of LNG production facilities, the Qatar government is expected to place orders for LNG carriers. It will take about 48 months to complete the LNG production facilities. Taking this into account, the Qatar government will need new LNG carriers around the end of 2023. "Qatar is expected to place orders for many LNG tankers. If its orders are delayed, we will be unable to deliver vessels at their desired dates," said an official of the Korean shipbuilding industry.