Japan’s Nisshin Shipping is in the process of selling its first and only LNG carrier newbuilding before taking delivery of the ship.

Brokers said the company has committed the 174,000-cbm vessel, which is on order as Hull No 2319 at Samsung Heavy Industries, to a resale deal.

The LNG carrier is listed as being ordered with an X-DF propulsion system for delivery in March 2022.

JP Morgan Asset Management, or its associates, is being named as the buyer, although it is unclear whether a sale has been concluded. The unit of banking giant JP Morgan has two LNG newbuildings on order at Samsung Heavy Industries and a further duo at Hyundai Heavy Industries contracted against Shell charters.

JP Morgan did not respond to requests for comment on this story, and Nisshin did not confirm the order when contacted by TradeWinds.

Rumours about the price and prospective buyer of the vessel have been swirling around the market for several days.

Some brokers said the newbuilding had been committed at over $170m, with one putting the price at closer to $175m. Another source following the business put it in the $160m range. The vessel is understood to have attracted many offers at much lower levels closer to $155m.

The ship is listed on Clarksons' Shipping Intelligence Network database as having been ordered at $191m apiece, which would appear to indicate a loss for Nisshin if details of the resale deal are correct.

Rare event

If the sale goes through, it would be the first LNG newbuilding resale for some time and gives an indication on how bearish the sector has become on asset values.

Shipbroker Fearnleys currently pegs the price of an ME-GI LNG newbuilding at around $184m, although other brokers have suggested levels have already slipped below this.

But aside from two Medmax, 90,000-cbm LNG carriers and an incoming large size floating storage and regasification unit, no deals have been concluded for conventional LNG newbuildings this year, leaving no benchmarks.

Nisshin, which is controlled by industry veteran shipowner Y Fujii, was making its break into LNG shipping with this single newbuilding ordered in an apparently speculative deal.

The company is no stranger to dealing with big name charterers on bulk tonnage. But those watching its apparent exit from LNG, before the company had even started trading the ship, have commented that it is a reflection of how the current market and opportunities for LNG carriers are perceived.

The LNG orderbook currently stands at around 130 vessels or just over 24% of the global fleet.

TradeWinds recently reported that around one-third of all on-order LNG carrier newbuildings remain unfixed.

Talk has been rattling around the market that other vessels may also be up for grabs as resales, while some others are mulling over whether to flip their orders to tanker tonnage where possible.

The LNG shipping market was already facing challenges at the start of this year as the market moved into a period of oversupply amid very low gas prices.

But the Covid-19 pandemic has cut energy demand resulting in cargo cancellations for the summer months and delays to new liquefaction projects which has heightened uncertainties about how LNG trade will play out this year and next.