Shipowner Adnoc Logistics & Services (Adnoc L&S) has pressed pause on its tender for LNG carrier newbuildings as prices at shipyards rise and the availability of berth slots is pushed further out.
Sources following the exercise said the company has opted to put its tender for five LNG newbuildings on ice until next year.
Adnoc L&S, the shipping arm of energy firm Abu Dhabi National Oil Co (Adnoc), kicked off its hunt for vessels in the first quarter of 2021 as it moved to tackle its LNG fleet-renewal requirements.
Newbuilding sources said five shipyards were approached, and the Abu Dhabi-based owner countered their initial offers with a price of $180m per ship.
They said the company had the expectation of contracting vessels at around the $185m mark.
But shipyard prices were already firming and the steel price hikes seen in the second quarter only accelerated this trend.
One South Korean broker said the price for a standard LNG carrier newbuilding is now in the range of $205m to $210m, with yards quoting even higher levels and additional design specifications adding to costs.
Berth crush
While some 2024 delivery berth slots may still be available, brokers detailed that the crush of containership enquiries is not showing any signs of slowing, as yet, with companies such as Ocean Network Express and Wan Hai Lines lining up for more tonnage.
There is also talk of more speculative LNG carrier enquiries, and Qatar is expected to ink the first in its huge haul of LNG newbuildings before the end of the year.
Brokers said the attention is now turning to open berths for delivery dates in 2025 as the earlier slots vanish.
Adnoc L&S has been seeking offers from shipbuilders on four firm vessels of 174,000 cbm and an optional ship.
The company is said to be looking for delivery dates from the fourth quarter of 2024 and the first three months of 2025.
The tender process for the LNG newbuildings had been due to be completed by May 2021.
Parent Adnoc has a long history in LNG. The company was one of the first large exporters, shipping its cargoes to Japanese buyers under long-term contracts.
In the mid-1990s, a fleet of eight Moss-type, steam turbine LNG carriers were built in Japan and Finland to lift the emirate’s exports.
| Vessel | Capacity (cbm) | Built |
| Al Khaznah* | 137,540 | 1994 |
| Shahamah | 135,469 | 1994 |
| Ghasha | 137,514 | 1995 |
| Ish | 137,540 | 1995 |
| Mubaraz | 137,000 | 1996 |
| Mraweh | 137,000 | 1996 |
| Al Hamra | 137,000 | 1997 |
| Umm Al Ashtan | 137,000 | 1997 |
* committed for conversion to floating storage unit
But these vessels now look small and inefficient compared with modern two-stroke LNG tonnage.
The company has already moved to find alternative employment for one vessel. It has chartered out the 137,540-cbm Al Khaznah (built 1994) on a 15-year deal, with a five-year extension option, to terminal developer Atlantic Gulf & Pacific.
The vessel is to be used as a floating storage unit for the new Karaikal terminal in India starting later this year.
But Adnoc L&S will also need to review its fleet and look at how it might upgrade them to comply with the incoming Energy Efficiency Existing Ship Index and Carbon Intensity Indicator from 1 January 2023.
Term charters with group company Adnoc LNG on these ships are due to end this year.
