Photo: LNG Carrier; Image credit: DSME

Korean shipbuilding heavyweights in $2.35 billion LNG bonanza

The world’s largest shipbuilders are tapping into the surging demand for LNG carriers. South Korea’s Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering Co (DSME) revealed today a combined order for 11 LNG carriers worth approximately $2.35 billion.

DSME said on Tuesday that it had won an order for seven LNG carriers from an unidentified company based in Africa. Under the KRW 2.036 trillion ($1.48 billion) contract, the shipbuilder is expected to deliver the vessels by February 2027.

According to Clarksons, the vessels are understood to be linked to the Qatar Energy project.

Further details about the order were not disclosed. DSME’s orderbook tally stood at 26 ships worth $6.43 billion back in August 2022, which is 72.2% of the company’s target. All the new ships have dual-fuel specifications, according to DSME. The latest contracts bring DSME’s ordering target for 2022 to 92% completion.

Separately, SHI disclosed in two stock exchange filings that it had won orders for a total of four LNG carriers. Samsung said that two LNG carriers have been booked by African regional shipowners. The vessels are scheduled for delivery in 2025 and are worth KRW 582 billion ($423.7 million).

The other LNGC pair was contracted by a shipowner from Bermuda region for a total of KRW 583 billion ($424.4 million). They are also slated for delivery in 2025.

SHI has achieved 82 percent of its target for this year standing at $8.8 billion.

The LNG market is experiencing a ‘perfect storm’, as explained by Panos Mitrou, Lloyd’s Register’s Global Gas Segment Director.

The pressure of the energy transition combined with the Ukraine crisis have seen a major increase in investment in liquefaction plants and a greater appetite for expanded Qatari production of gas. The demand for LNG imports is further ramping up as countries look at alternatives to Russian imports, spurring the demand for LNG carriers.

The LNG carrier market is expected to record a compound annual growth rate, or CAGR, of approximately 3.6% from 2022-2027.