Kawasaki Heavy Industries has confirmed orders for up to two dual-fuel VLGCs from Singapore shipowner Kumiai Navigation.

The order is for one firm 86,700-cbm LPG/liquefied ammonia gas newbuilding, plus an option for a second vessel, the Japanese shipbuilder said.

Kawasaki Heavy plans to complete construction at its Sakaide Works by 2025. Financial terms were not disclosed.

The contract represents the yard’s 77th LPG carrier, 14th LPG-fuelled LPG carrier and seventh LPG/liquified ammonia gas carrier.

Kumiai Navigation told TradeWinds in late May that it had signed a letter of intent with Kawasaki Heavy for the two newbuildings, taking its spending on VLGCs to $410m.

The Tomomaru Kuroyanagi-led shipowner is due to take delivery of a VLGC newbuilding from Kawasaki Heavy this month.

The VLGC newbuilding orderbook stood at 66 vessels at the beginning of June, according to Fearnley Securities.

It said this represents an orderbook-to-fleet ratio of about 22%, with the bulk of the vessels to be delivered in 2023.

“While an orderbook at around 22% is relatively high, it remains at low levels compared to that of previous ordering booms in 2007/08 and 2015/16,” Fearnley Securities said.

However, after 2023, the investment bank said the orderbook shrinks to five VLGC newbuildings, although deliveries of some ships are expected to slip into 2024.

Offsetting this large number of deliveries next year will be upcoming regulations and propulsion technology focus that will affect the fleet.

“A substantial part of the fleet will be subject to Energy Efficiency Existing Ship Index regulation [which] is expected to both lower utilization and potentially accelerate scrapping of the older fleet,” Fearnley Securities said.

It said 32 vessels, or around 10% of the fleet, are older than 25 years. Including units older than 15 years takes this number to 23%.