HD KSOE bags $371 mn LNG bunker ship order

The outlook for South Korean shipbuilders’ liquefied natural gas (LNG) bunkering ship construction looks bright as the global LNG-powered ship industry is expected to enjoy windfall gains from the new US government’s pledge to boost the oil and gas industry.

South Korea’s biggest shipbuilder HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE) announced on Monday that it won a 538.3 billion won ($371 million) order to build four LNG bunkering vessels, each with a capacity of 18,000 cubic meters (m³).

The shipbuilding holding firm under Korean major conglomerate HD Hyundai Co. said its subsidiary HD Hyundai Mipo Co. will construct the four LNG bunker ships for an unnamed shipper in Africa to be delivered in phases starting in 2028.

Considering that until the end of last year, the company had bagged seven LNG bunker vessels in total, its latest LNG bunker ship contract forges a brighter path for its LNG bunkering ship business amid growing expectations for a rise in global LNG production.

Its smaller peer HJ Shipbuilding & Construction Co. also said Friday that it secured an order from Liberia to build one unit of the same size LNG bunkering vessel for 127.1 billion won.

An LNG bunker ship is a tanker that supplies LNG fuel to other vessels in ship-to-ship bunkering operations. Orders for such ships are set to rise as LNG has emerged as one of the popular eco-friendly ship fuel alternatives.

LNG PRODUCTION AND DEMAND IS SET TO RISE

According to the Korea LNG Bunkering Industry Association, the number of LNG-powered vessels, excluding LNG carriers, will jump to 1,174 units in 2033 from 472 in 2023.

Global industry research firm IMARC Group also projected that the global LNG bunker vessel market will grow to $5.4 billion in 2032 from $3.0 billion in 2023 to meet surging LNG-fueled vessel operations.

Multiple foreign news media reported that ExxonMobil Corp. recently consulted with Chinese and Korean shipbuilders about possible LNG bunker vessel orders.

The US energy giant is reportedly looking to secure enough dockyards to build its LNG bunkering ships as it plans to double LNG production in the US and Qatar by 2030.

Its plan has gained further traction after the new US government under President Donald Trump lifted a pause on export permit applications for new LNG projects last month as part of its efforts to raise US fossil fuel energy output.  

Korean shipbuilders will seek to widen the technology gap with Chinese rivals in high-value-added ship construction to benefit the most from the upcoming heyday in the global LNG energy production and trade markets, said Yoo Sang-cheol, chief executive officer of HJ Shipbuilding & Construction’s shipbuilding business.

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.