South Korea’s three ship-building giants – Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering – are gearing up to benefit from the increased demand for the LNG and LPG gas vessels.
Last Thursday, Reuters reported that The U.S. Energy Department approved Oregon LNG to export liquefied natural gas, in a move to capitalise on the high gas prices in Asia and a glut of cheap domestic shale gas.
Oregon LNG, which is controlled by Leucadia National Corp, has been authorized by the department to export up to 1.25 billion cubic feet per day of the fuel for 20 years. It hopes to begin exporting LNG in 2017.
On Wednesday, the Federal Energy Regulatory Commission approved construction of the Freeport LNG Development project in Texas, the third project gaining full U.S. approval to ship the fuel to countries with which Washington does not have a free trade agreement.
The first of those, Cheniere’s Sabine Pass plant in Louisiana, is expected to begin shipping LNG next year.
This drive towards LNG has been reflected in the demand for purpose-build natural gas transporter ships. According to the statistics of LNG vessels larger than 140,000 m3 and LPG vessels larger than 60,000 m3 provided by Clarksons, 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 scored 46 vessels during the first half of this year.
As a confirmation of this upward tendency, Business Korea reports, that Samsung Heavy Industries received orders for six very large ethanol carriers (VLEC). These vessels are worth US$720 million in total, and 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 an eight-fold increase 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.
Article continues below this message
Have your opinion heard with Shale Gas International
We accept interesting, well-written opinion and analysis articles of up to 1,500 words, that offer unique insights into the shale industry. The articles cannot be overtly promotional in nature and need to fit into at least one of our content categories.
If accepted, the article must be exclusive to Shale Gas International website and cannot appear on any other websites, publications, etc. Each article may contain up to three links to external websites relevant to the content discussed in the piece.
If you would like to contribute to Shale Gas International website, please contact us at: editor[at]mw-ep.com