13 Ships, $1.7 Billion in New Orders Placed YESTERDAY

South Korea’s Hyundai Heavy Industries (HHI) and China’s STX Offshore and Shipbuilding had a heck of a day yesterday with 13 new shipbuilding orders placed.

HHI won orders for 4 liquefied natural gas (LNG) carriers and 1 LNG floating storage regasification unit (FSRU) worth USD $1.1 billion. This includes orders to build two 162,000 cbm LNG carriers for Golar LNG of Norway and two same-class ships for an unnamed European shipowner.

The contract with Golar LNG includes an option exercisable by the Norwegian company for two additional same-class LNG carriers. LNG carriers for Golar LNG will be built by Hyundai Samho Heavy Industries, a Hyundai Heavy affiliate.

Golar LNG Chairman John Fredriksen comments:

“We are excited to see the rapid developments in the LNG market. We clearly see LNG as one of the key parts in the future energy supply chain. The increased flexibility provided by floating production and regas solutions has transformed the LNG industry and made it significantly more competitive versus other energy types. The large global spreads in gas prices, the high growth in trade, and the tight availability of shipping gives this investment a solid foundation.”

These membrane-type LNG carriers, scheduled to be delivered between the second quarter of 2014 and the first half of 2015, will feature the Dual Fuel Diesel Engine System (DFDE) which allows the ships to run primarily on clean-burning natural gas.

Additionally, Hyundai Heavy won an order to build a third LNG Floating Storage Regasification Unit (FSRU) for Hoegh on February 13. The contract for the LNG FSRU is an option exercised by Hoegh from the original contract signed in June 2011. The 170,000 cbm LNG FSRU is scheduled to be delivered by the second quarter of 2014.

Adding to the 5 orders placed to Hyundai yesterday, an 8-ship order was submitted to STX Offshore and Shipbuilding on the same day. This 682.2 billion won (USD $607 million) order included 2 LNG carriers and 6 tankers for European shipowners. According to Yonhap news, the two owners are Sovcomflot, Russia’s largest shipping company, and the so-called “John Fredriksen Group”, which indicates Bermuda-based Frontline/Knightsbridge Tankers.

Background about LNG FSRUs

LNG FSRU receives liquefied natural gas from offloading LNG carriers. The installed regasification system provides gas send-out through flexible risers and pipelines to shore. LNG FSRUs take a year less, and cost half as much as an onshore LNG terminal to complete.