Orders for Q-Flex and Q-Max LNG carriers resume this year after a hiatus of around 10 years. In this market segment, the major South Korean shipbuilders, i.e. Korea Shipbuilding & Offshore Engineering, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries are the only experienced companies. They are expected to benefit a lot from the recovery, as the price of each Q-Flex or Q-Max LNG carrier is around 300 billion won.
South Korean shipbuilders won eight orders for LNG carriers this month, including six in the segment of those with a capacity of at least 200,000 cubic meters. Specifically, Korea Shipbuilding & Offshore Engineering and Daewoo Shipbuilding & Marine Engineering won three each. For reference, the number of orders in the segment amounted to six between 2019 and 2021.
LNG carriers are divided into conventional (17,500 to 180,000 cubic meters), Q-Flex (about 210,000) and Q-Max (about 260,000). The first Q-Flex and Q-Max orders were placed by Qatar in the early 2000s.
The number of such orders reached around 30 at the end of the 2000s. Then it did not increase at all until last year. Indeed, most ports are unable to accommodate these large vessels, around 350 meters long and at least 50 meters wide, although the vessels are competitive in carrying a large quantity.
The recovery in orders is due to the growing importance of LNG as a green fuel. According to Shell, global LNG demand is expected to increase from 380 million tonnes to 700 million tonnes from 2021 to 2040 and the recovery is linked to the fact that land transport from Russia to Europe is replaced by maritime transport after its invasion of Ukraine.
According to industry sources, the six new LNG carriers are to carry US shale LNG, Qatar plans to order more than 100 LNG carriers for the next six years, and most of the vessels are likely to be Q-Flex or Q- Max. This is good news for the three shipbuilders. The price of each of the six vessels is around 290 billion won while the average price for 174,000 cubic meter LNG carriers, which is an industry standard, is around 240 billion won.