China’s Yangzijiang Shipbuilding is constructing its first two LNG carriers on speculation after shipping interests linked to the vessels opted not to move forward with the ships.
TradeWinds has been told that payment instalments on Hull Nos YZJ2022-1475 and YZJ2022-1476 have not been made and the yard is opting to continue with their construction for its own account.
The two 175,000-cbm vessels are due for delivery in December 2025 and April 2026, respectively. The first vessel is expected to undergo sea trials from Jiangsu Yangzi Xinfu Shipbuilding Co’s yard in Taixing, Taizhou, next year.
The two newbuildings were secured by the yard in October 2022 and were the first LNG carriers to be contracted by the shipbuilder.
Unveiling the orders, Yangzijiang’s executive chairman and chief executive Ren Letian said in 2022 that the order marked “a new chapter for the group”.
The company no longer comments on specific business.
At the time, Germany’s Hammonia Reederei was linked to the newbuilding duo and the company is listed as the owner of the vessels on Clarksons’ Shipping Intelligence Network database. The non-state-owned yard and owner were said to have a long relationship together on newbuildings.
But shipowning sources said both vessels have been quoted as being built on speculation by the yard for some time.
Hammonia Reederei has been contacted for confirmation and comment. No price is listed against the LNG newbuildings but similar vessels contracted at Chinese yards in the same quarter of 2022 were priced at about $235m each. This compares with levels at closer to $260m today.
Yangzijiang is expected to start marketing the LNG carrier newbuildings for sale in the coming months.
But brokers said there is less appetite for speculative tonnage at present with several ships contracted by big-name owners remaining open.
They pointed to the Biden administration’s pause on new liquefaction projects in the US as one of the factors that is upsetting market dynamics and blurring the demand picture for the next few years.
Little new LNG volume was expected to come onto the market in the next two years but the picture is set to change as projects come online from 2026.
But last week, US LNG producer Cheniere Energy chief commercial officer Anatol Feygin, who was speaking on a results call, told analysts that supply constraints in the LNG market are being pushed out by around a year to 2026 to 2027, when new capacity should start up.
In addition, shipowners and brokers said that would-be buyers for these vessels could prove cautious as these are the shipbuilder’s first attempt at LNG carrier construction.
They also stressed that any buyer would likely need to have lined up a charter in advance of any purchase.
