More than 30 LNG carrier newbuildings worth close to $9bn in total have been contracted in the first half of 2023, with more expected to follow in the second half of the year.
According to data compiled by TradeWinds and shipbrokers, contracts for at least 34 ships have been inked. Almost all were agreed at South Korean yards, with just six being inked with shipbuilders in China.
Japanese shipowner NYK Line appears to have been the most prolific, notching up nine LNG orders at Hyundai Group yards. Four of these were against pre-negotiated slots with German utility EnBW.
The shipowner, which contracted its more recent two ships on 30 June, also looks to have paid the highest price, with this last duo announced at $261.3m each.
During the first half, Greek owner Dynagas added to its haul of larger 200,000-cbm LNG ships, specially designed for long-haul trades from the US, with a further five newbuildings.
Others such as Capital Gas and Mitsui OSK Lines have piled on more vessels that appear to be uncommitted, despite the strong prices.
The last month also saw US major Chevron move on its first two vessels in 10 years as it starts to renew and grow its fleet to handle the volumes it is buying.
Chevron became the first company to secure 2028 delivery slots at a South Korean shipyard.
Rising prices
Clarksons’ Shipping Intelligence Network weekly report details that there are currently 331 LNG carriers on order comprising 52.4% of the global fleet.
It has been a quieter first half on LNG orders than in 2022, when a record total of more than 100 ships were contracted in the first six months of 2023.
But prices are significantly higher this year.
At the start of 2023, LNG carriers were being contracted at just less than $250m apiece. But prices have now risen to more than $260m. This compares with a price of $211m being quoted by Clarksons for LNG ships at the start of January 2022 and rising to $231m in June of that year.
LNG newbuilding numbers in 2022 were also elevated by Middle East producer QatarEnergy opting to firm up its pre-reserved berths with shipowners.
Busy second half
QatarEnergy has started moving on the second phase of its huge shipbuilding project, kicking off negotiations with shipyards and owners. Around 40 vessels could be firmed up within this year under this, but the exact timing is unclear and some believe orders could slide into 2024.
The industry continues to keep a weather eye on the 17 LNG carrier berths being held for the Mozambique LNG project and whether this project will move forward, and these firmed up.
But on top of both these large projects, newbuilding players are expecting an active second half on LNG carrier orders.
Brokers point to the volumes of LNG, which energy majors are signing up to under long-term contracts, that will need new, large and efficient tonnage to ship it.
Companies are also looking to fleet renewal efforts as new emissions regulations start to kick in. But with limited availability on berths — South Korean yards are largely offering just 2027 deliveries at present — and strong prices, market players said these decisions could be postponed.
