Korea Shipbuilding & Offshore Engineering (KSOE) has largely crammed its order ebook for the subsequent 2-1/2 years because the pandemic drove demand for container ships, leaving little room to satisfy the wants of the liquefied pure gasoline (LNG) sector, a senior firm govt mentioned.
With U.S. LNG exports rising, extra LNG carriers are touring longer distances to clients in North Asia and Europe whereas European nations have snapped up floating storage and regasification items (FSRUs) as they ramp up LNG imports to switch Russian gasoline provides within the wake of the Ukraine disaster.
Nevertheless, shipyards in South Korea and China are unable to accommodate demand for brand new LNG vessels as they work to satisfy a flood of orders for brand new container ships following international provide chain disruptions and port congestion which have held up ships in the US and China. This helps spot chartering charges for LNG carriers which have hit all-time highs.
“An enormous quantity of new-build orders have taken up slots in China and South Korean shipyards,” Ok.W. Kim, senior vice chairman at Hyundai Heavy Industries, flagship unit of the world’s largest LNG provider builder KSOE, instructed Reuters.
KSOE’s capability is sort of full with orders stretching to 2025, he mentioned, including that container ships and LNG carriers every account for about 30% of slots. KSOE builds 20 to 22 LNG carriers per 12 months.
South Korean shipyards are additionally struggling to function attributable to labor shortages whereas grappling with costs practically doubling for key materials metal plates, Kim mentioned.
“At this second, we will not obtain new orders for FSRUs,” he added.
In 2020, Qatargas and TotalEnergies had booked shipbuilding slots for LNG initiatives in Qatar and Mozambique respectively, he mentioned, whereas U.S. LNG producers are additionally looking for extra vessels as they ramp up exports.
“Shipowners get pleasure from good constitution charges,” Kim mentioned.
About half of the new-build orders for business vessels are for ships geared up with twin gasoline engines – both LNG or methanol – with oil, he added. Hyundai Heavy is constructing container ships for A.P. Moller-Maersk that run on methanol.
Kim mentioned there’s additionally an increase in demand for smaller oil tankers – Aframax and Medium-Ranged sized vessels – as Europe seems to import extra oil merchandise from elsewhere to switch Russian provides.
(Reuters – Reporting by Joyce Lee and Florence Tan; Modifying by Sonali Desai)