LNG

Chinese shipyards are benefiting from the surge in orders for newbuilds from the liquefied natural gas sector and more LNG berths are being made available, while oil and petroleum product tankers and containership orders are also increasing.

Gaztransport and Technigaz (GTT), the French designer of maritime liquefied natural gas storage and fuel tanks, has received another order from the Chinese Jiangnan shipyard as its busines in China gathers pace.

GTT said the latest order was for the cargo containment and cargo handling systems design fortwo large capacity LNG carriers.

As part of this order, GTT said it would provide the design and associated engineering services for the vessel’s tanks, which will each offer a capacity of 175,000 cubic metres.

The tanks will be fitted with the GTT Mark III Flex membrane containment system, a technology developed by GTT.

GTT added that the two vessels were scheduled for delivery in the first and second quarters of 2025.

“We are very pleased to accompany Jiangnan in a new phase of our collaboration, as these vessels are the first large LNG carriers to be built by Jiangnan shipyard,” said Philippe Berterottière, Chairman and Chief Executive of GTT.

“We will do whatever it takes to make this cooperation a great success,” added the CEO.

LNG growth

The Jiangnan shipbuilding business is one of China's larger shipyard facilities and is located northeast of Shanghai on Changxing Island at the mouth of the Yangtze River.

In mid-March 2022, GTT received an order from the Jiangnan shipyard for tank designs for four very large LNG-powered containerships on order for the leading Asian shipping company, Pacific International Lines.

Each vessel will be able to carry 14,000 20-feet equivalent units (TUE) containers and are scheduled to be delivered from the Chinese yard progressively from the second-half of 2024 through to the first half of 2025.

The LNG fuel tank of each vessel will offer a capacity of 13,800 cubic metres and will be fitted with the Mark III membrane containment system.

The tanks will also include unique features to facilitate a potential conversion of these vessels to ammonia fuel in the future.

In addition to the engineering services and on-site technical assistance, GTT explained that t would assist PIL through every step of their first LNG-fuelled project.

GTT said this would include commissioning of the LNG tanks, first LNG bunkering operations, as well as further specific LNG operations and maintenance of the vessels.

QatarEnergy has placed the first batch of LNG shipbuilding orders with South Korean shipyards consisting of four vessels from Daewoo Shipbuilding & Marine Engineering (DSME) and two vessels from Samsung Heavy Industries (SHI), as part of QatarEnergy’s shipbuilding program to serve future expansion plans.

Cosco Shipping Energy Transportation, the biggest Chinese owner and operator of oil and gas vessels and with a growing number of over 40 liquefied natural gas carriers in its fleet, has approved an investment in three LNG carriers for the Russian Arctic LNG II project of Novatek and its partners.

The European Commission’s antitrust regulator has delivered its interim report and asked for more data on the proposed takeover by one of the world’s main LNG carrier builders, South Korea’s Hyundai Heavy Industries, of its Korean shipbuilding rival, Daewoo Shipbuilding & Marine Engineering.

The decision by the European Union Commission’s competition body has gained more importance after Qatar Petroleum signed the largest LNG shipbuilding agreements in history at the start of June to book berths for more than 100 ships valued at around $20 billion from the three largest South Korean yards.

Hyundai Heavy Industries, DSME and Samsung Heavy Industries are the recipients of the Qatar Petroleum berth bookings.

The EU executive body opened its probe into HHI’s acquisition of DSME when the takeover deal was first announced in March 2019.

“We have received the interim report (from the EC), but we could not reveal its details as the party concerned with the investigation,” said a Korean shipbuilding executive.

He added that the EU antitrust body had asked for more data from the companies and a final decision was now expected by September 2020.

The deal needs regulatory approval from six jurisdictions, the EU, South Korea itself, China, Kazakhstan, Japan and Singapore.

The EU Commission had temporarily suspended its probe in March 2020 because of the Covid-19 pandemic

In March 2019, Hyundai Heavy Industries Group signed a deal to buy a 55.72 percent stake in DSME for US$1.8 billion. If the deal is finally confirmed it would create the world's biggest shipbuilder with a 21 percent share in the global market.

In an attempt to reorganise before acquiring DSME the Hyundai Heavy Industry Group split Hyundai Heavy Industries into two entities, Korea Shipbuilding, a sub-holding company that governs the shipbuilding units in the group, and a reorganized Hyundai Heavy Industries Co.

Korea Shipbuilding & Offshore Engineering (KSOE), the Hyundai Group holding company, now oversees shipbuilding units in the group.

KSOE currently manages the group's three shipbuilding companies, Hyundai Heavy Industries, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries.

Under the Qatari deal for newbuilds, HHI, DSME and Samsung are reserving a major portion of their LNG ship construction berths for Qatar through to 2027.

The Qataris in May 2020 also signed a deal with Korea’s main shipbuilding rival, China.

They booked slots to build eight 175,000 cubic metres capacity LNG carriers at China’s Hudong–Zhonghua Shipbuilding and options for eight others, giving a possible final order value of around $3Bln.

The Gulf state has now secured around 60 percent of global LNG shipbuilding capacity through to 2027 and will slowly expand its fleet over the next seven or so years as its own production increases.

Qatar’s North Field expansion in the Gulf will raise the nation’s LNG production capacity from 77 million today to 126 million tonnes per annum by 2027.

Cosco Shipping Energy Transportation, the Chinese shipping line with more than 30 liquefied natural gas carriers in it fleet, said it approved a plan to order three more LNG carriers.

Norwegian-listed company Stolt-Nielsen said its natural gas unit was still pursuing its small-scale liquefied natural gas projects through Avenir LNG, including the delivery of six small-scale carriers.

Stolt-Nielsen Gas is continuing to invest in opportunities in LNG shipping and distribution, said the company with offices in London in its business review just published of all its divisions.

Its assets currently include 45 percent of Avenir LNG, a 2.3 percent stake in Golar LNG and six small-scale LNG carriers newbuilds under construction.

“Avenir’s strategy is to source, ship, store, distribute and sell LNG to small-scale, stranded communities that do not have access to a natural gas grid,” said Niels G. Stolt-Nielsen, the Chief Executive of the Stolt-Nielsen group.

Two strategic partners joined SNG as investors in Avenir, Golar LNG Ltd and Höegh LNG, each taking a 22.5 percent stake with Stolt-Nielsen retaining 45 percent.

Avenir has four 7,500 cubic metres capacity LNG vessels and two 20,000 cubic metre capacity carriers on order as it also continues to develop its first LNG terminal on the Italian island of Sardinia.

Stolt-Nielsen has LNG in its portfolio along with its tanker, storage, containers and sea farm businesses.

The Norwegian company with a presence in worldwide locations has its ordinary shares listed on the Oslo stock exchange.

The company reiterated in the annual report that its small-scale carriers were still on track for delivery in 2020 and 2021. 

Keppel Marine of Singapore is scheduled to deliver two 7,500 cubic metre LNG vessels by mid-2020, from their affiliated yards in Nantong, China. 

In 2021, Sinopacific Offshore & Engineering (SOE) will deliver two more 7,500 cubic metres capacity carriers as well as two with 20,000 cubic metres capacity from their yards, also in Nantong. 

Each of the ships is designed to perform safe ship-to-ship bunkering.

In October 2019, together with Malaysian shipping company, MISC Berhard, Avenir signed a term charter with Malaysia’s national oil and LNG production company Petronas.

The first 7,500 cubic metres capacity carrier will be based in Malaysia, enabling Petronas to provide bunkering to LNG-fueled vessels, plus transport services for small-scale terminals in the region. 

Avenir announced another a term charter in November 2019 with Golar Power to deliver LNG using the second 7,500 cubic metres capacity vessel to various ports in Brazil, as well as providing ship-to-ship bunkering. 

“Over the longer term, Avenir plans to develop new markets through small-scale LNG import solutions, invest in additional tonnage where necessary and expand its network of strategic bunkering locations,” said SNG.

The Stolt-Nielsen unit reported an operating loss of $4.1 million for 2019. 

“The losses were mainly attributable to costs related to the continued development of various small-scale LNG projects,” it added.

The company noted that during the fourth quarter of 2019, Stolt-Nielsen sold its investment in Avance Gas Holdings Ltd for $25.9 million. The $10.8 million gain on the sale was recorded to retained earnings.

The American Bureau of Shipping, the US classification society, said a small-scale LNG carrier, the world’s first such vessel to be fitted with an innovative cargo containment system based on IMO requirements for independent type A tanks, has been delivered to the shipping line from the Chinese shipbuilders.

Gaztransport and Technigaz (GTT), the French technology firm for designs of systems for the maritime transportation and storage of liquefied natural gas, said it signed a technical and licensing agreement with Chinese shipbuilder Wison Offshore and Marine for a range of LNG vessels.

The liquefied natural gas shipping sector has seen its largest number of orders since 2014 as traditional and new entrants sign contracts with South Korean, Japanese and Chinese shipyards for vessels to handle the LNG production surge, while the impact has been felt in average annual charter rates.