Niche Market
Korea’s three biggest shipbuilding companies are promoting LNG and LPG gas vessels to meet the increasing demand and break through the recent recession.
Shale gas is natural gas that is found trapped within sedimentary rock (shale) formations. As the development of shale gas surged since last year, the orders of gas vessels are increasing accordingly.
According to the statistics of LNG vessels larger than 140,000 m3 and LPG vessels larger than 60,000 m3 provided by Clarksons, a shipbuilding and shipping research company, on August 3, there were only eight new orders of gas vessels worldwide from 2008 to 2009. However, this increased to ten in 2010 and 56 in 2011. The number of new gas vessel orders stayed at 49 in 2012, but jumped to 77 in 2013, and after all scored 46 vessels during the first half of this year.
The International Energy Agency (IEA) estimates shale gas reserves to have 187.4 trillion m3, which can be consumed worldwide for 59 years.
Additional orders of gas carriers are expected thanks to the development of shale gas. Currently, shale gas is developed primarily in the US, but this will be expanded to Russia and China, according to an industry professional.
To reflect this expectation, Samsung Heavy Industries received orders for six very large ethanol carriers (VLEC). Six vessels are worth US$720 million (740 billion won), and these will be the very first VLECs in the world. Per-vessel size is 88,000 m3, and the price is US$120 million. These vessels will be delivered by January 2017.
Hyundai Heavy Industries (including Hyundai Samho Heavy Industries) won five orders of gas carriers in 2010, but 42 last year, about eight times higher within four years. This accounts for 57 percent of total new gas carrier orders worldwide.
Daewoo Shipbuilding & Marine Engineering had no gas carrier orders in 2010, but received ten vessel orders in 2011, and 22 during the first half of this year.