A series of LNG development projects are scheduled to be launched throughout the first half of this year to raise market expectations
At present, Korean shipbuilders are accounting for some 80% of the international order backlog in the LNG carrier industry and therefore expected to take the lion’s share of new shipbuilding orders. “LNG carriers and LNG-FSRUs, or floating storage and re-gasification units, cost US$200 million to US$300 million each and their high added value will contribute greatly to the shipbuilding industry’s efforts for productivity enhancement,” said an industry insider.
Particularly, major local shipbuilders are paying keen attention to the Yamal LNG Project in Russia, through which up to 16 new LNG carriers are built from this summer. Since the vessels are going to be used in the Arctic Ocean region, the unit price of the ships is estimated at from US$300 to US$350 million, at least US$100 million higher than that of general LNG carriers, and the total value ordered at between US$3.6 billion and US$5.6 billion. Novatek, the Russian natural gas company that has 80% shares in the project, has recently visited Korea to discuss business cooperation with the Korea Trade Insurance Corporation. Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering (DSME) and STX Offshore & Shipbuilding are making preparations for the bidding now.
In the meantime, Samsung C&T Corporation and GDF Suez in France are bidding on the contract for an LNG-FSRU project in Uruguay. The final bid is scheduled to start in April. Samsung Heavy Industries is likely to join the project as the shipbuilder once Samsung C&T wins the deal.
Samsung Heavy is also expecting much from another LNG-FSRU project in Jordan as Golar LNG, an LNG shipping company in close partnership with it, has been awarded the contract. “There is some possibility that Golar LNG will convert some of the previously ordered LNG carriers into LNG-FSRUs,” said the company. An LNG-FSRU is US$70 million to US$100 million more expensive than an LNG carrier. Samsung and Hyundai Heavy Industries are about to win orders for six new LNG carriers in Nigeria, too. Nigeria LNG Limited is going through final negotiations before placing four orders to Samsung and the other two to Hyundai.
In addition, Hyundai Heavy, Samsung Heavy and DSME are currently in possession of eight LNG carrier options combined -- one by Hyundai, four by Samsung and the rest by DSME -- which can be exercised in or before July, raising the expectations of additional new orders. Canadian shipping company Teekay, which gave orders for two LNG carriers to DSEM in December last year, is showing its intent to exercise three of its options.