Hudong-Zhonghua is expected to secure the first large LNG carrier order this year, achieving a “zero breakthrough” for China’s shipbuilding industry in the construction of large LNG carriers.
According to foreign media reports, Nigeria LNG Limited (NLNG) is updating its fleet, and its shipping subsidiary Bonny Gas Transport (BGT) has selected Hudong-Zhonghua to build the first batch of 3+3 174,000 cubic meter LNG carriers. The first three vessels are scheduled for delivery in 2029.
If this order is finalized, it will be NLNG’s first time ordering LNG carriers from a Chinese shipyard, and also the first large LNG carrier order secured by Hudong-Zhonghua and China’s shipbuilding industry this year. However, sources indicate that the formal construction contract may not be signed until next year.
It is reported that Hudong-Zhonghua engaged in fierce competition with South Korean shipyards to win this order and ultimately emerged victorious. Industry insiders point out that the cost of these newbuilds for Hudong-Zhonghua may be lower than $240 million (approximately RMB 1.706 billion), but this information has not yet been confirmed.
For reference, Clarksons data shows that the current newbuilding price for a 174,000 cubic meter LNG carrier is about $248 million (approximately RMB 1.762 billion), slightly lower than the $260 million from the same period last year. Recently, HD Korea Shipbuilding & Offshore Engineering announced receiving an order for two 174,000 cubic meter LNG carriers, with a unit price of about $253 million.
NLNG disclosed at the end of last year its plan to comprehensively update its fleet over the next 10 years, replacing all 23 existing vessels. This is a significant measure taken by the company to achieve its 2040 net-zero emission target. NLNG’s General Manager of Production, Nnamdi Anowi, stated at the time that approximately 25% of the company’s emissions come from its fleet.
In March this year, it was reported that BGT, as the shipping subsidiary, began seeking available shipbuilding slots for LNG carriers. Subsequently, the company formally issued inquiries to shipyards around mid-year and began evaluating commercial offers after September.
Currently, BGT operates 13 LNG carriers, including 6 dual-fuel diesel-electric (DFDE) propulsion LNG carriers built at South Korean shipyards in 2013 through its BGT Plus program. These 6 vessels were delivered between 2015 and 2016, with 4 built by Samsung Heavy Industries and 2 by HD Hyundai Heavy Industries. Apart from these 6 vessels, the remaining 7 vessels in BGT’s fleet are steam turbine LNG carriers.
All of BGT’s LNG carriers are chartered by NLNG. Including BGT’s fleet, NLNG has a total of 23 long-term chartered LNG carriers and one LPG carrier serving the domestic Nigerian market. The company produces approximately 22 million tonnes of LNG annually at its Bonny Island project, transporting cargoes globally through its extensive chartered fleet.
Since the beginning of this year, orders for large LNG carriers have declined significantly. According to Clarksons statistics, global new orders for large LNG carriers of 140,000 cubic meters and above total only 20 vessels year-to-date. In contrast, the full-year figure for last year was as high as 77 vessels, second only to the record 175 vessels in 2022, making it the second-highest in history.
It is worth noting that the vast majority of this year’s 20 large LNG carrier orders were secured by South Korean shipyards, including 7 by Samsung Heavy Industries, 7 by HD Hyundai Samho, 4 by Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), and 2 by Hanwha Ocean’s U.S. shipyard, Hanwha Philly Shipyard (formerly Philly Shipyard). These two vessels will also primarily be built by Hanwha Ocean.
In comparison, out of the global total of 77 large LNG carrier new orders (15.73 million cubic meters) last year, Chinese shipyards secured 28 vessels (7.204 million cubic meters), capturing a 46% market share. This included Hudong-Zhonghua’s orders for a total of 24 of the world’s largest Q-Max type 270,000 cubic meter LNG carriers under the second phase of Qatar’s “Hundred-Ship Project,” and Dalian Shipbuilding Industry’s order for 4 175,000 cubic meter LNG carriers. South Korean shipyards secured 49 large LNG carrier orders (8.526 million cubic meters), representing a 54% market share.
Hudong-Zhonghua is a leading enterprise in the domestic large LNG carrier construction sector. Data shows that by 2024, Hudong-Zhonghua has successfully secured orders for over 100 LNG transportation vessels and has delivered 54 LNG transportation vessels. This has driven the global market share of China’s main LNG equipment from less than 5% in 2008 to over 30% currently.
In the first 10 months of this year, Hudong-Zhonghua has delivered 8 LNG carriers, achieving its annual target two months ahead of schedule and exceeding the “14th Five-Year Plan” capacity doubling plan. Currently, Hudong-Zhonghua has a backlog of over 50 LNG carriers, with more than 20 under construction. The total number of deliveries this year will reach 11 vessels, setting a new domestic annual record again.
Clarksons data shows that Hudong-Zhonghua’s current total order backlog stands at 89 vessels (10.69 million deadweight tons), including 38 container ships, 49 large LNG carriers, and 2 LNG bunkering vessels, with delivery schedules extending to 2028. In the field of building large LNG carriers of 140,000 cubic meters and above, Hudong-Zhonghua currently ranks third globally among individual shipyards with 49 vessels in its order book, behind only Hanwha Ocean (59 vessels) and Samsung Heavy Industries (56 vessels).
