The three Chinese shipyards - one of only three of which has experience in building large LNG tankers - have won a record of nearly 30% of the total 163 new LNG ship orders globally this year, affirming their position in the field in which South Korea - the world's largest LNG ship maker - often accounts for the majority of the market share.
According to Reuters, orders for LNG tankers from Chinese shipyards have tripled as Chinese gas traders and fleet operators seek to secure transportation, amid skyrocketing fares due to the Russia-Ukraine conflict.
As Korean shipping lines have been operating at full capacity to serve Qatar's huge North Field expansion, Chinese shipyards have also attracted more overseas orders.
Li Yao, founder of Beijing-based consulting firm SIA Energy, said that as more and more gas businesses seek domestic shipyards, they will be forced to learn and develop the industry.
According to transportation data provider Clarksons Research, Chinese shipyards have won 45 orders for LNG tankers this year, worth an estimated $9.8 billion, about five times the value of orders in 2021.
Shanghai-based Hudong-Zhonghua Shipbuilding Company is the only Chinese shipbuilding workshop with experience in building large LNG tankers and has delivered dozens of ships since 2008. This year, the company received 75% of new orders from China.
Hudong-Zhonghua shared 26 orders from local owners - compared to 9 orders in the past two years - with units of the China State Shipbuilding Group, Dai Lien Shipbuilding Industry Group and Jiangnan Shipbuilding Factory.
Two other factories - China Merchants Heavy Industry and Yangzijiang Shipbuilding - were certified to build large LNG tankers this year and have attracted the attention of domestic and foreign owners.
LNG tankers are one of the most difficult to build, taking up to 30 months. For ships with containers, 200 workers had to spend two months welding thin steel partition walls such as paper and 13 km of connecting road.
Workers working on air conditioning systems at minus 160 degrees Celsius must be certified by Gaz transport & Technigaz - a French engineering company holding patents and design licenses for shipbuilders.
Hu Keyi - corporate technology director at Giang Nam Shipyard - said that he will have to face a shortage of skilled workers. Giang Nam is building the first 80,000 cubic meters of oil tanker for JOVO Energy based in Guangdong and has won an order from Abu Dhabi National Oil and Gas Company (ADNOC) to build two 175,000 cubic meters of LNG tankers.
In terms of relatively low financial costs, with the support of Chinese banks, said Jacky Cai, director of JOVO Energy, a company considering ordering a larger tanker.
Robert Songer, an analyst at cargo consultancy ICIS, said that China has many such LNG shipbuilding orders partly due to the need to transport 20 million tons of LNG per year from the US. It is estimated that China needs about 80 ships to transport US LNG.
Over the next five years, the global LNG fleet is expected to increase by 33%. About 9% of the world's LNG ships are Chinese.
In addition to serving China's needs, these ships could also be used to trade goods on other routes, said Stephen Gordon, CEO of Clarksons Research.
In addition to domestic orders, Chinese factories have also received 19 orders from abroad this year and this number may increase.
ICIS analyst Songer said that Chinese shipyards are becoming more attractive because South Korea has overloaded orders and costs here are also increasing.
However, according to Sunny Xu - founder of the Singapore-based C-LNG company - despite the higher cost, Korean shipping lines such as Hyundai and Daewoo have more efficient designs and technology, while having local supply chains.
