SEOUL, June 2 (Reuters) - Korea Shipbuilding & Offshore
Engineering (KSOE) has mostly filled its order book
for the next 2-1/2 years as the pandemic drove demand for
container ships, leaving little room to meet the needs of the
liquefied natural gas (LNG) sector, a senior company executive
With U.S. LNG exports rising, more LNG carriers are
traveling longer distances to customers in North Asia and
Europe while European countries have snapped up floating storage
and regasification units (FSRUs) as they ramp up LNG imports to
replace Russian gas supplies in the wake of the Ukraine crisis.
However, shipyards in South Korea and China are unable to
accommodate demand for new LNG vessels as they work to meet a
flood of orders for new container ships following global supply
chain disruptions and port congestion that have held up ships in
the United States and China. This supports spot chartering rates
for LNG carriers which have hit all-time highs.
"A huge volume of new-build orders have taken up slots in
China and South Korean shipyards," K.W. Kim, senior vice
president at Hyundai Heavy Industries, flagship unit
of the world's largest LNG carrier builder KSOE, told Reuters.
KSOE's capacity is nearly full with orders stretching to
2025, he said, adding that container ships and LNG carriers each
account for about 30% of slots. KSOE builds 20 to 22 LNG
carriers per year.
South Korean shipyards are also struggling to operate due to
labor shortages while grappling with prices nearly doubling for
key material steel plates, Kim said.
"At this moment, we can't receive new orders for FSRUs," he
In 2020, Qatargas and TotalEnergies had booked shipbuilding
slots for LNG projects in Qatar and Mozambique respectively, he
said, while U.S. LNG producers are also seeking more vessels as
they ramp up exports.
"Shipowners enjoy good charter rates," Kim said.
About half of the new-build orders for commercial vessels
are for ships equipped with dual fuel engines - either LNG or
methanol - with oil, he added. Hyundai Heavy is building
container ships for A.P. Moller-Maersk that run on methanol.
Kim said there is also a rise in demand for smaller oil
tankers - Aframax and Medium-Ranged sized vessels - as Europe
looks to import more oil products from elsewhere to replace
(Reporting by Joyce Lee and Florence Tan; Editing by Sonali