Two shipbuilders in South Korea have finally signed with four shipowners for a total of 17 LNG carriers worth more than $3bn that will be assigned to the Total-led Mozambique LNG project.
But the contracts have conditions attached.
From 18 December into 22 December, two shipowners have contracted a total of nine newbuildings at Hyundai Samho Heavy Industries.
The vessels are understood to be for the accounts of Japanese shipping giants Mitsui OSK Lines and K Line. MOL is believed to have taken the lion's share with at least five of the newbuildings.
At Samsung Heavy Industries, shipowners inked contracts for eight vessels in the same period.
Japan's NYK Line is linked to four of these. Greek shipowner Maran Gas Maritime is said to be behind the other quartet, as reported by TradeWinds on Tuesday.
Announcements by Korea Shipbuilding & Offshore Engineering (KSOE) — the Hyundai Heavy Industries Holdings unit that controls shipyards within the group — price the Hyundai Samho vessels at just over $182m each. The company did not reveal the identities of the contracting parties.
The last vessel is due for delivery in September 2024.
Conditional contracts
But all the contracts on the LNG carrier newbuildings appear to be conditional.
The contracts on the eight SHI vessels are valid until 31 May 2021 while no clear details on the terms on the Hyundai Samho vessels were given.
South Korean newbuilding experts said the contractual arrangement effectively leaves the orders wide open and would allow the owners behind them to cancel the ships before the cut-off date.
Those following the business said the shipowners are likely waiting on signing long-term time-charter contracts with the partners in the Mozambique LNG project.
Construction work on the liquefaction project, which will pump out 12.88 million tonnes per annum (mtpa) of LNG from two production trains, has started but is on hold after militant attacks in the region.
Two weeks ago, an attack on a village was reported just 20 kilometres from the plant's site on the Afungi Peninsula in the far north-east of Mozambique.
The 17 LNG carrier newbuildings have been a long time in the making.
The shipowners were selected in April and the orders were expected to be signed in the middle of this year.
Mozambique LNG is East Africa’s first LNG project.
It is due to be in operation by 2024 with 90% of the first phase production already sold.
There is potential to expand the project to 50 mtpa.
