China is planning to pool resources for competition with South Korea in building liquefied natural gas (LNG) carriers, said industry insiders, adding that, the country has already surpassed many global rivals in mega container vessel shipbuilding.
South Korean shipbuilders, including Samsung Heavy Industries Corporation and Hyundai Heavy Industries, got 86 percent (52 orders) of the world’s total of LNG carriers in 2018, China, Singapore and Japan shared the remaining nine, according to data from Clarkson Research Services.
LNG carrier building is more demanding for technology than does conventional storage vessels. LND needs to be stored at a temperature as low as -163 ℃ and storage is mainly powered by steam turbines. The price of an LNG can reach as high as $200 million to $250 million.
At present, China still heavily depends on foreign LNG carriers for LNG imports, with external capacity dependence rate about 60 percent.
The heavy reliance entails huge risks in transport security. Imagine any foreign shipowner stop providing for whatever reasons, China could have trouble with LNG imports. Energy security is never just a matter of money.
Under such circumstance, the country sees market in this area as a must-have and absolutely not a nice-to-have. And it resolves to deploy more resources to develop LNG independently.
Shanghai-based Hudong-Zhonghua Shipbuilding (Group) Corporation, China’s only builder of mega LNG carriers currently, has delivered 17 carriers to global shipowners since 2008. It got another four orders for 174,000-cubic-meter vessels, and delivered first of them to joint investors CNOOC Energy Technology and Services Ltd and Royal Dutch Shell Plc in July 2018.
The ships were priced at more than $200 million each. It is huge enough to store LNG for three weeks’ demand of Shanghai City. Every year, every ship will be used to convey to China 1.5 million metric tonnes of LNG produced by Queensland Curtis LNG project.
The remaining three are currently under construction and are scheduled to deliver to the shipowners by 2019.
China is estimated to import 60-100 million tonnes of LNG on an annual basis by 2022, that is to say, the global market would need another 60- 100 carriers.
Many countries, including China, India and European countries, are releasing eco-friendly energy policies to improve environment protection, and major energy producers such as Russia, Australia and the US are pushing energy exports, so global demand for LNG carriers is expected to surge.
The world has about 500 LNG carriers by the end of 2018, and the figure is estimated to increase to 600 by 2022.