The Hundred Ships Plan adds another order! Hyundai Heavy Industries wins another large order for 7 LNG carriers.

Qatar's "100-ship plan" has received another order. LNG transportation companies from China, Japan, and Malaysia have jointly ordered 7 LNG carriers from Hyundai Heavy Industries Group in South Korea. Since the first order was placed with Hudong-Zhonghua in April this year, Qatar has ordered a total of 41 LNG carriers from four shipyards in China and South Korea in just four months.

Another 7 ships! Hyundai Heavy Industries Group has received orders for 19 LNG carriers from Qatar.

On August 10, 2023, Korea Shipbuilding & Offshore Engineering (KSOE), the shipbuilding business holding company of Hyundai Heavy Industries Group, announced that it had signed a contract with an Asian shipowner for the construction of seven 174,000 cubic meter LNG carriers, with a total value of 1.9628 trillion won (approximately US\$1.5 billion).

These seven LNG carriers will be built at Hyundai Heavy Industries' Ulsan shipyard and are scheduled for delivery to the shipowner between 2025 and July 2026. The ships will measure 299 meters in length, 46.4 meters in width, and 26.5 meters in depth. They will be equipped with WinGD's latest X-DF 2.1 iCER main engine and an air lubrication system to reduce greenhouse gas emissions, achieve low fuel consumption across a wide range of speeds, and reduce environmental impact.

This latest order is part of Qatar's "100-ship plan." The price per ship is approximately US\$214.4 million, comparable to the price of the first batch of ships ordered from Korea Shipbuilding & Offshore Engineering under Qatar's "100-ship plan," but significantly lower than the current international market price of US\$236 million.

Korea Shipbuilding & Offshore Engineering officially began accepting orders for Qatar's 100 LNG carrier project in June. On June 7, the company announced that it had received an order for two 174,000 cubic meter LNG carriers from a European shipowner, with a total contract value of approximately 537.5 billion won (approximately US\$430 million). On July 7, the company announced that it had signed contracts for eight and two 174,000 cubic meter LNG carriers with shipowners in Europe and Oceania, respectively. The South Korean industry believes that both batches of orders are part of Qatar's "100-ship plan."

To date, Korea Shipbuilding & Offshore Engineering has received orders for 41 LNG carriers this year, ranking first among global shipbuilding companies and further solidifying its market leadership in the LNG carrier construction sector. In 2020 and 2021, Korea Shipbuilding & Offshore Engineering received orders for 21 and 26 LNG carriers, respectively, also holding the highest market share globally.

A relevant person from Korea Shipbuilding & Offshore Engineering stated: "The demand for LNG carriers has remained strong since last year, and especially this year, thanks to the increase in LNG demand due to the global energy crisis, the company has continuously received numerous inquiries for new LNG carrier orders from many shipowners. While consolidating the LNG carrier industry chain, the company will continue to lead the environmentally friendly shipbuilding market by developing alternative ship fuel technologies such as methanol and ammonia."

According to statistics, as of now, Korea Shipbuilding & Offshore Engineering has received orders for 161 new ships this year, with a total contract value of US\$19.29 billion, reaching approximately 110% of its annual target of US\$17.44 billion.

In addition, South Korea's three major shipbuilders have received orders for 83 LNG carriers this year. Among them, Korea Shipbuilding & Offshore Engineering received 41 orders, ranking first among the three major shipbuilders; Samsung Heavy Industries received 24 orders, ranking second; and Daewoo Shipbuilding & Marine Engineering received 18 orders, ranking third.

A total of 41 ships! Asian LNG transportation companies jointly order Qatar LNG carriers.

It is understood that this LNG carrier order from Hyundai Heavy Industries Group was placed by a joint venture company established by China LNG Shipping (Holdings) Co., Ltd. (CLNG), Nippon Yusen Kaisha (NYK), Kawasaki Kisen Kaisha (K-Line), and MISC Berhad (MISC).

The joint venture shipowner company is 25% owned by each of CLNG, NYK, K-Line, and MISC. On August 9, the company signed a long-term charter contract for seven 174,000 cubic meter LNG carriers with QatarEnergy and a construction contract with Hyundai Heavy Industries Group.

CLNG, NYK, K-Line, and MISC are all major LNG carrier operators in Asia. Previously, these four companies formed a consortium to bid on 12 LNG carriers in QatarEnergy's "100-ship plan." This means that in addition to the latest seven ships ordered from Hyundai Heavy Industries Group, the joint venture company may order an additional five LNG carriers.
 

        It is understood that CLNG is an LNG investment company with 50% equity held by China Merchants Energy Shipping and COSCO SHIPPING Energy. As of December 31, 2021, the CLNG fleet operated 21 LNG carriers with a total deadweight tonnage of 1.6556 million DWT and an average age of 5.8 years. It is the first LNG carrier transportation company in mainland China and the most powerful and well-managed LNG carrier operation and investment management company in Greater China.

Since the launch of its first LNG carrier, the Echigo Maru, in 1983, NYK has accumulated extensive technical experience and networks in LNG transportation over 39 years. According to Clarkson's data, NYK currently operates at least 39 LNG carriers and one LNG bunkering vessel through its subsidiaries.

Like NYK, K-Line also has about 40 years of experience in LNG transportation, with its first Japanese-flagged LNG carrier, the Bisho Maru, launched in 1983. Clarkson's data shows that K-Line's fleet operates 15 LNG carriers.

It is worth mentioning that NYK and K-Line have had a close cooperative relationship with Qatar for decades. Between 1996 and 2000, NYK, K-Line, and MOL jointly built 10 137,000 cubic meter MOSS-type LNG carriers for the Qatargas 1 project. This was Qatar's first LNG project, and with the Qatargas 1 project as a foothold, Qatar gradually developed into the world's largest LNG supplier.

In addition, MISC is currently one of the world's largest single LNG carrier owners and operators, renowned for its comprehensive operational excellence, reliability, safety, and timely cargo delivery. Currently, the company's Gas Assets & Solutions (GAS) fleet includes 30 LNG carriers, six very large ethane carriers (VLECs), and two LNG floating storage units (FSUs), with a total deadweight tonnage exceeding 2 million tons.

As the world's largest LNG producer and exporter, Qatar is vigorously promoting the expansion of the North Field project, planning to increase its LNG production capacity from the current 77 million tons to 126 million tons per year after 2027. To meet the gas field expansion plan, QatarEnergy also needs to expand its LNG fleet. The initial plan is to build 60 LNG carriers to support the planned capacity expansion; in the next 10 years, Qatar's LNG carrier construction projects are expected to exceed 150 ships.

In April this year, Hudong-Zhonghua signed a contract with MOL for the construction of four LNG carriers, marking the first batch of LNG carrier orders from Qatar. In June, the first batch of official orders for LNG carriers from Qatar to South Korea were also finalized, with Daewoo Shipbuilding & Marine Engineering receiving orders for four, Hyundai Heavy Industries Group for two, and Samsung Heavy Industries for fourteen. In July, Hyundai Heavy Industries Group received another order for ten LNG carriers from Qatar.

Including the latest seven, a total of 41 LNG carriers have been officially ordered for Qatar's "100-ship plan" so far, including 19 from Hyundai Heavy Industries, 14 from Samsung Heavy Industries, and four each from Daewoo Shipbuilding & Marine Engineering and Hudong-Zhonghua. In addition, it is reported that Daewoo Shipbuilding & Marine Engineering will sign orders for at least nine more Qatari LNG carriers in the near future.

Wood Mackenzie, an energy consulting firm, predicts that 79 million tons of new liquefied natural gas investment will be added annually over the next two years, including 33 million tons/year from North America, 16 million tons/year from Qatar, and 20 million tons/year from Russia. The Asia-Pacific region remains the "main engine" driving the growth of global LNG trade volume. In 2021, China surpassed Japan for the first time to become the world's largest LNG importer with a cumulative import volume of 77.637 million tons, and the construction of domestic LNG projects is also accelerating simultaneously. Driven by the strong growth expectation of global LNG trade, the demand for LNG shipping capacity continues to grow, and the corresponding capacity is expected to grow simultaneously.

Based on the "New Momentum" plan recently released by BP, a multinational energy company, the Export-Import Bank of Korea (KEXIM) predicts that the global LNG trading volume will grow by an average of 4.3% annually by 2035, so the number of new LNG vessel orders globally will remain high until 2030. (Wang Chu)