Korean large shipbuilders including Big3 is expected to see greatly increased orders for liquefied natural gas carrier.
Analyst Jeon Jae-Chun at Daishin Securities said, “The number of LNG carriers of which tenders to open by 2014 exceeds 80 units in total,” and added, “Ship values of LNG carrier are highly expected to increase as demand for LNG newbuilding is concentrated in late 2016 to 2017 to be delivered.
Jeon explained that there are greatly increasing tenders for LNG carrier around the world. Also, LNG carriers for shipping shale-gas reached 44 units out of 80 LNG carrier newbuildings to be put out to tender by next year.
The analyst said that the year of 2017 is when the US shale-gas export kickstarts and at the same time LNG export begins from Russia, Africa and so on. There will be a large newbuilding order spree in 2014, which is three years ahead of when vessels are needed for shipping, thus, Korean shipbuilders are expected to win more than 40 units of LNG carrier from the fourth quarter of 2013 to 2014.
However, as for Russia, the unit cost of development is more expensive than other regions, hence the analyst added that there are chances that project development or order contracts might be postponed.
Korean shipbuilders’ share of global LNG carrier market approaches to 76% in orderbook terms as of June, 2013, and when LNG carrier order increases, Korean Big3 builders will get the most benefit from it, said the analyst.