With the global LNG (liquefied natural gas) vessel market expected to turn around soon, Samsung Heavy Industries (SHI), recently won its first bulk vessel order of the year.
SHI announced on May 11 that it obtained an order from Golar LNG Energy, a British company, to build six ships, four of them being LNG. The contract totals US$1.2 billion, with completion scheduled for the first half of 2014.
The vessels are of the electric propulsion type and 160,000m3 scale. The eco-friendly ships use dual-fuel engines to generate power, consuming both diesel and natural gas, and sail by means of electric motors.
“Golar LNG Energy is a leading shipping company with nine LNG and four LNG-FSRU (floating storage and re-gasification unit) vessels and this is the first time it has entered a partnership with us,” said SHI president Noh In-shik, adding, “We have built over 70 LNG vessels until now and will try to win more deals down the road by making the most of our expertise and know-how.”
The bulk order secured by SHI can be interpreted as a sign of a rebound in the LNG vessel market which has been in the doldrums since the global financial crisis in 2008. Between 2004 and 2007, 30 to 40 orders were placed each year, with the figure reaching as high as 71 in 2004.
During recent years, industry experts have forecast that LNG demands are likely to surge due to high oil prices and this could lead to an increasing number of LNG vessel orders across the world. Nations’ rising interest in eco-friendly energy supports this prediction.
Furthermore, the recent earthquake in Japan is being predicted to act as a catalyst for the popularization of alternative energy, including LNG. Currently, Russia’s Gazprom is continuing with the relevant bidding, with Qatar Gas Transport Company (QGTC) about to follow.
In the meantime, SHI achieved over 40% of its annual sales target of US$11.5 billion through the contract. The gross value of orders the company received in 2011 totals approximately US$4.7 billion. It has secured deals for 20 vessels this year, including four drill ships, nine container vessels and one platform supply vessel.
*Electric-propulsion LNG vessel, the same type as what SHI is to deliver to Golar LNG Energy.