Korean LNG shipyard Daewoo confirms Russian project orders cancelled amid newbuild surge

Tuesday, 06 December 2022
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South Korean LNG shipbuilder, Daewoo Shipbuilding and Marine Engineering (DSME), said it cancelled the last of three LNG carrier orders from 2020 to serve the Yamal LNG export facility in Arctic Russia, operated by natural gas company Novatek.

DSME said it had now cancelled all three contracts on the vessels ordered two years ago as the client had failed to meet the pre-payment schedules for the ships on time as Western-led sanctions led to financial and other restrictions on Russia after the Ukraine invasion.

Novatek and its partners in Yamal LNG as well as the Arctic LNG II project have placed large previous orders for icebreaking LNG carriers with South Korean shipbuilders.

Newbuild berths

DSME signed the newbuilding contract in October 2020 for Yamal LNG vessels that amounted to $760 million for the three ships.

The cancellations come amid a global scramble for newbuild LNG shipbuilding berths at yards in South Korea, China and Japan.

Seapeak LLC, the re-branded Teekay LNG following its January 2022 acquisition by New York-based equity fund Stonepeak for $5.3Bln, confirmed that it had ordered five 174,000 cubic metres capacity vessels from another South Korea shipyard, Samsung Heavy Industries (SHI).

The ships will cost around $1.1Bln and are scheduled for delivery in 2027.

SHI said in a recent regulatory filings that it had obtained $9.2Bln worth of orders so far this year, surpassing its yearly order target of $8.8Bln.

It marked the second year of SHI beating contract targets in the booming LNG shipping sector.

SHI explained that from its 45 vessel orders this year a total of 35 were for LNG carriers.

Overall orders

Clarkson Research Service a shipping consultancy and data collector has revised its newbuild forecast for LNG.

The firm said that a total of $56Bln of orders had been received by the third quarter of 2022 with LNG newbuilds comprising 94 ships with 16 million cubic metres capacity and amounting to $19.7Bln of the global order total.

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