Offers are due on Friday for up to five LNG bunker vessel newbuildings for charter to energy major Shell.
Those following the rapidly growing sector said Shell is seeking bids on two firm LNGBVs of between 18,000 cbm and 20,000 cbm.
Shell is said to have requested delivery dates in the first half of 2027 and may consider later handover options.
The major is said to be offering charters of between five and seven years on the vessels, which it said will be for worldwide trading.
Offers were originally due in on the newbuildings on 9 October but this has since been extended to Friday this week.
Shell has been contacted about its LNGBV enquiry.
What has been described as an “enormous amount” of shipowners are being invited to offer in on the newbuildings, with one source putting the number of those approached by the major at between 30 and 40.
He said some of those are described as serious owners but with a large sprinkling of others who have yet to be serious contenders in the business.
Similarly, a number of shipyards in China, South Korea and Singapore are said to be fielding offers from would-be owners for the newbuildings.
Sources named China’s Nantong CIMC Sinopacific Offshore & Engineering Co, and possibly Huangpu Wenchong Shipbuilding Co and Jiangnan Shipyard, as likely participants, along with HD Hyundai Mipo in South Korea and Singapore-based Seatrium. But they said other tier-two Chinese yards could also be in the frame.
Newbuilding prices are currently super-strong for most vessel sectors and LNGBVs are no exception.
Brokers said South Korean-built ships of Shell’s specifications are coming in at between $92m and $93m while Chinese yards are closer to $86m.
In 2021, the major chartered in two large LNGBV newbuildings contracted that year by South Korean owners at prices in the $50m range.
Shell’s enquiry for a tranche of LNGBVs is being widely welcomed as giving impetus to the build-out of LNG bunkering infrastructure.
The surge in LNG dual-fuelled newbuildings, many of them large container ships, will start delivering later in 2025, and there is a perception that there is a deficit in the number of LNGBVs available.
It is also expected to give the major what one market player described as “phenomenal benchmarking” on LNGBV newbuildings.
But some have expressed concerns that Shell’s enquiry could result in “a race to the bottom”, with newcomers prepared to take sub-market charter rates for entry into the sector.
They said the major is in a position to offer low returns and it will depend on whether owners are willing to do an accelerated depreciation on newbuildings over more conventional charters paying sustainable rates to existing owners.
