CMI will build its first LNG carriers as China continues to grow its share of LNG carrier orderbook (CMI)
Published Jan 4, 2023 by The Mritime Executive
China Merchants Industry (CMI) has become the latest shipbuilder to break into the highly covenanted market for LNG carriers reporting its first construction order for large gas carriers from a European shipowner. The order comes as Chinese shipbuilders have been moving aggressively to build their share in the segment resulting in a record year for orders in 2022.
The order is for an initial four ships each with a capacity of 180,000 cbm which are believed to be for Celsius Tankers, a Danish shipowner which last year declared its intent to expand operations with LNH carriers. Celsius ordered an LNG carrier from South Korea’s Samsung Heavy Industries in late 2022, but with the South Korean building slots booked till 2026 and beyond is believed to have turned to the Chinese. CMI reports the order is for four vessels, with the first ship due to be delivered in early 2026. The contract includes two options each for two additional vessels.
The series of LNG carriers will be built at CMI’s Haimen shipyard based on a design jointly developed by Deltamarin and the Haimen shipyard. CMI also signed a licensing agreement with GTT for the French company’s membrane containment system for large gas carriers.
“The signing of this construction contract is a major breakthrough for China Merchants Industry in entering the large-scale LNG carrier construction market, and it also reflects the recognition of China Merchants Industry's LNG carrier design and construction capabilities,” said CMI. They noted that the company has been developing its expertise including the 2019 construction of a smaller, 45,000 cbm gas carrier and work for the modification of LNG carriers.
CMI joins other major Chinese shipyards that broke into the segment in 2022 for the first time presenting a significant challenge to South Korea’s shipbuilders. Analysts calculated that China grew its market share to 30 percent of the orders for LNG carriers in 2022 up from under 10 percent in 2021. CSSC’s Hudong Zhonghua was the first Chinese yard to deliver a large LNG carrier while in 2021 Jiangnan Shipyard, DSIC, and Yangzijiang Shipbuilding all won their first orders for LNG carriers.
Clarksons Research calculated that there was a 130 percent increase in the tonnage ordered for LNG carriers. Of the total 14.52 million compensated gross tons (CGT) ordered, 70 percent or over 10 million CGT went to the South Korean yards. Tw0-thirds of the shipbuilding orders in 2022 in South Korea were for LNG carriers, which due to their complexity are also the highest value new orders. The expectation is that orders for new LNG carriers will remain strong in part driven by Qatar’s expansion of its production due to be completed in 2027.