At present, Chinese shipyards hold a record number of LNG carrier orders.
Previously, Chinese shipyards led the world in the market share of crude oil, product and dry bulk
carriers. But Samsung Heavy Industries, Hyundai Heavy Industries and Daewoo Shipbuilding&Marine
Engineering (Daewoo Shipbuilding&Marine) Engineering and other South Korean shipyards have the
highest market share in the LNG carrier segment.
In recent years, the global competition for long-term LNG supply contracts after the escalation of the
Russia-Ukraine conflict has led to a surge in LNG new ship orders, and South Korea's shipbuilding
capacity has been pushed to the limit, creating a good opportunity for Chinese shipyards to expand
their business.
Most of China's LNG carrier orders are undertaken by China State Shipbuilding Group Co., LTD. (CSSC),
according to statistics, the company received a total of 49 LNG carrier orders in 2022, with a hand
order volume of about 60 ships, and the delivery schedule is scheduled to 2028.
In the first half of 2023, Chinese shipyards received 14 orders for large LNG carriers, accounting
for 35% of global orders in the same period. In 2021, Chinese shipyards will account for less than 7%.
In addition to CSSC, Jiangsu Yangzijiang Shipyard and China Merchants Heavy Industries began
accepting LNG carrier orders in October and December 2022, respectively, bringing
China's LNG carrier orders in 2022 to 55.
CSSC said it will mainly build ships with a capacity of 174,000 to 175,000 cubic meters, while CMHI will mainly build LNG vessels with a capacity of about 180,000 cubic meters.
LNG carriers in South Korea cost about $285 million to build, and prices are rising due to a lack of slipways and rising raw material and financing costs, industry sources said.
Due to strong demand, its cost also rose from about $230 million to $250 million, CSSC said. If Chinese shipyards can maintain high quality and complete on time, it will be conducive to further consolidating their dominant position.
In early September, CSSC launched a new ship type - 271,000 cubic meters LNG carrier in Hudong Zhonghua, which has received the Approval in Principle (AiP) certificate from the four major classification societies, becoming the world's largest LNG carrier, larger than Qatar's Q-Flex vessel (210,000 cubic meters) and Q-Max vessel (266,000 cubic meters).
On the demand side, China has signed about 40 LNG long term agreements since 2021, equivalent to about 54 million tons/year of supply, nearly half of which are FOB contracts with the United States. In contrast, between 2016 and 2020, China signed only 17 LNG long term agreements, equivalent to about 14 million tonnes per year, mainly for delivery on board (DES) at the port of destination.