At about 8 a.m. on May 1, the workers’ Festival, the fourth generation of the world’s largest shallow water channel and China’s first 80000 cubic meters of liquefied natural gas (LNG) transport ship No. 2, the river sea intermodal transport ship, slowly left the wharf of China Cssc Holdings Limited(600150) Hudong Zhonghua Changxing Shipbuilding Base and started the gas trial voyage.
On April 28, Hudong Zhonghua shipbuilding (Group) Co., Ltd. and China Cssc Holdings Limited(600150) Industrial Trade Co., Ltd., as joint sellers, signed a construction contract for six 174000 cubic meters large liquefied natural gas (LNG) transport ships with the buyer’s representative, Japan Post Shipping Co., Ltd. (NYK). The total amount of the contract reached more than 8 billion yuan, breaking the record of the largest one-time contract amount of LNG ships in ChinaP align = “center” global LNG supply exceeds demand, with a record number of transport ships
From China to the world, LNG shipbuilding industry has shown a high momentum in recent years, which is related to the sharp rise of global LNG demand.
Since the entry into force of the Paris Agreement, more and more countries around the world have begun to formulate greenhouse gas emission reduction strategies. In 2021, the European Commission announced the draft of a package of climate legislation proposals aimed at achieving the emission reduction target of 55% in 2030, which will promote the green development of shipping from the legislative level; In recent years, due to the requirements of environmental protection, the scale of “coal to gas” and “oil to gas” in various parts of China has increased, which has also led to a rapid increase in the demand for natural gas.
According to the International Energy Agency’s (IEA) 2050 net zero emission roadmap for the global energy sector, from now to 2050, the consumption of natural gas will increase significantly, the consumption of coal will decrease, and the oil will enter the platform period. The demand for natural gas will increase from 3.9 trillion cubic meters in 2020 to 4.6 trillion cubic meters in 2030.
In terms of trade volume, although the epidemic has affected global industrial production in recent two years, the demand for LNG remains unabated.
From the perspective of LNG carrier market, in 2021, the new shipbuilding order of LNG carrier reached a record 90, which was the largest in a single year.
According to the statistics released by several institutions, at least 75 orders for large LNG carriers will be generated in 2021. In addition, three midsize / medmax ships of about 80000 cubic meters are booked in the shipyard and will operate in Asia. There are orders for 12 small LNG carriers less than 45000 cubic meters, almost all of which will be used as liquefied natural gas bunkering vessels (lngbv).
According to the data of Clarkson shipping information network, the previous peak years of new shipbuilding orders for LNG carriers were 2004 and 2018, when the number of orders above 140000 cubic meters reached 68 and 66 respectively.
Similarly, according to Clarkson’s data compiled by shipping review, by the end of 2021, the global offshore LNG fleet had a capacity of 50.51 million dwt, and the number of LNG ships increased to 621, with a year-on-year increase of 5.08%. The growth rate remained stable on the whole. From the perspective of transport capacity structure, large-scale and specialization have gradually become the direction of ship construction. Among many ship types, LNG carriers with more than 140000 cubic meters account for the largest proportion. The unit transportation cost of large ships is lower, the transportation efficiency is higher, and the carrying capacity is larger, so they are more and more popular. Between 2010 and 2021, the number of large LNG ships with more than 140000 cubic meters increased by 298. In 2021, large LNG ships with more than 140000 cubic meters accounted for 74.4% of the total number of shipsP align = “center” from “single handed” to “team operation”
For many years, the LNG carrier market has been controlled by South Korea, and the vast majority of orders have fallen into the pockets of South Korean shipbuilding enterprises. China is “fighting alone” by relying on only one shipyard of Hudong Zhonghua shipbuilding.
According to Clarkson data, as the world’s largest shipbuilding country, China’s shipyards won about 52% (by DWT) of new shipbuilding orders in the world in 2021. However, in the field of LNG ships, there is a significant gap between Chinese shipyards and Korean shipyards, which is mainly reflected in the market share. As high as 88% of global LNG ship orders in 2021 were won by Korean shipyards.
In 2022, Chinese shipping enterprises finally made efforts, Hudong China, the leader of Chinese LNG ship manufacturing, took the lead, and Jiangnan Shipbuilding and large ship group also made a breakthrough in the construction of large LNG ships.
On January 6, Hudong Zhonghua renewed the construction order of a 174000 m3 LNG ship with China Cssc Holdings Limited(600150) (Hong Kong) shipping Leasing Co., Ltd; On January 7, CNOOC’s medium and long-term FOB resource supporting LNG ship project was officially signed. Hudong Zhonghua again won orders for six 174000 cubic meters of large LNG ships, with the relevant contract amount of 7.5 billion yuan.
On March 30, Jiangnan Shipbuilding (Group) Co., Ltd. signed a contract with ADNOC Logistics & services, a subsidiary of Abu Dhabi National Oil Company, for the construction of two 175000 m3 LNG ships, realizing China’s first order for the pure international market in the field of large LNG ships.
On March 31, Dalian shipbuilding industry group Co., Ltd. and China Merchants Energy Shipping Co.Ltd(601872) officially signed the construction contract of 2 + 2175000 m3 LNG ships.
On April 12, Qatar, the world’s largest LNG exporter, officially announced that the first batch of four LNG ship orders signed between its “100 ship plan” and Hudong Zhonghua, a leading LNG enterprise in China, came into force.
In addition, Shanghai Waigaoqiao Free Trade Zone Group Co.Ltd(600648) shipbuilding held the commencement ceremony of a-box enclosure system simulation cabin for ultra-low temperature liquefied gas in the center of the thin sector. The official commencement of LNT a-box enclosure system simulation cabin marks that Shanghai Waigaoqiao Free Trade Zone Group Co.Ltd(600648) shipbuilding industry will officially enter the field of LNG ship construction. Chinese shipyards are impacting the LNG market on a large scale. Four large shipyards have made great efforts, and the effect is very impressive.
So far, China Cssc Holdings Limited(600150) industry has formed a new situation of “three pillars” in the field of large LNG ships, such as Hudong Zhonghua, Jiangnan Shipbuilding and large ship group, which has changed the disadvantage of single enterprise “single handedly” participating in international competitionP align = “center” Qatar orders are hard won
In fact, among the Chinese shipping enterprises competing for LNG carrier orders with South Korea, the most worthy book is the battle for LNG carrier orders in Qatar.
At the beginning of 2019, Qatar Petroleum Corporation said that it would conduct international bidding to order up to 60 LNG ships to meet the transportation needs of the four LNG production lines completed in 2024. Subsequently, Qatar announced that it would build more than 100 LNG ships in the future, hence the name of Qatar’s “100 ship plan”.
Located in the Middle East, Qatar has rich natural gas storage resources and is very easy to exploit. It is the largest producer and exporter of liquefied natural gas in the world. In 2019, Australia surpassed its market share and became the world’s largest LNG exporter for the first time. In order to maintain its market share, Qatar announced early to expand production and purchase ships.
Qatar’s big order of the century immediately attracted great attention from the international shipbuilding industry, and a large number of shipbuilding enterprises showed interest in the project. Among them, the three shipyards in South Korea are bound to win this century’s big order. At that time, some market observers said that the LNG ship orders in Qatar may be taken by the three major shipyards in South Korea.
South Korea is full of confidence, but the plot will soon usher in a turning point.
In November 2019, the delegation of Qatar natural gas company immediately transferred to Beijing to contact China Cssc Holdings Limited(600150) industry group after the visit to South Korea. According to China Cssc Holdings Limited(600150) news, as early as February 2019, the China shipbuilding trade union Hudong Zhonghua under China Cssc Holdings Limited(600150) group has officially expressed its intention of cooperation to Qatar.
In April 2020, Qatar energy company took the lead in signing the LNG ship construction project agreement with China Cssc Holdings Limited(600150) group with an amount of 20 billion yuan, which achieved the largest new shipbuilding agreement signed by Chinese shipbuilding enterprises so far.
In October 2021, China Cssc Holdings Limited(600150) Industrial Trading Co., Ltd., a subsidiary of China Cssc Holdings Limited(600150) Group Co., Ltd., and Hudong Zhonghua officially received the order for the construction of the first batch of four 174000 cubic meters of liquefied natural gas (LNG) carriers.
Tu Jianjun believes that there are two reasons why Hudong Zhonghua can “grab food from the tiger’s mouth” from South Korea, “First, from the perspective of upstream LNG producing countries, Qatar actually does not want the construction of LNG ships to be monopolized by one country, so it is willing to see the competition between shipyards in different countries, so it will have more options and greater negotiation space. Therefore, Qatar will probably continue to maintain cooperative relations with all parties in the LNG industry chain of China, South Korea and Japan in the future.”
\u3000\u3000 “In addition, it is also inseparable from the efforts of China’s shipbuilding industry in recent years. Through the collective cooperation and vigorous tackling of key problems of relevant parties in China, China has basically conquered the core technology of manufacturing LNG ships. The shipbuilding cycle of Chinese shipyards may be longer than that of South Korea, especially there is a certain gap with that of South Korea. However, from the perspective of Qatar, an upstream LNG producing country, comprehensively compare the shipbuilding cycle, cost, quality and government relations And many other factors, we must make the procurement decision that is the best for our own interests. “
Tu Jianjun, President of Agora (Bozhong Zhihe) energy transformation forum in China and former director of the China Cooperation Department of the International Energy Agency, said that through the collective cooperation and vigorous tackling of key problems of relevant parties in China, China’s shipbuilding industry has basically conquered the core technology of manufacturing LNG ships. Although there is still a gap with South Korea, the gap is not large.
