Will the Shipbuilding Cycle Be Extended?... Emerging LNG Carrier Order Market [Click e-Stock]

Major LNG Projects Secure Final Approval
Active Moves to Secure LNG Carrier Delivery Slots

Despite uncertainties surrounding tariffs, large-scale LNG projects centered in the United States are getting underway, leading to expectations that LNG carrier orders will increase starting next year. Analysts suggest that the upward performance cycle for domestic shipbuilders could be prolonged through 2028.

On September 26, NH Investment & Securities provided this analysis regarding the shipbuilding industry outlook. First, as soon as the Donald Trump administration lifted the temporary suspension on new LNG projects enacted by the previous government, U.S. LNG developers began launching new projects.

Woodside announced its Final Investment Decision (FID) for the Louisiana LNG project. Cheniere Energy, the largest private LNG exporter in the United States, also confirmed the FID for its LNG export terminal project at the Port of Corpus Christi in Texas. FIDs have been announced for five major projects, including Venture Global’s CP2 and NextDecade’s Rio Grande LNG project.

The combined LNG production capacity of these projects totals 54 million tons per year, equivalent to 80 large LNG carriers. In the case of floating LNG projects (FLNG), the first phase of the Argentina FLNG project has already been finalized. The Coral Norte FLNG and Delfin FLNG Unit 1 are expected to be confirmed within the fourth quarter of this year. In total, LNG projects to be finalized within this year amount to 66.9 million tons, which translates to 95 LNG carriers.

To reach a final investment decision, securing buyers and arranging financing must be completed to a certain level before moving into the construction phase. Barring any sudden macroeconomic changes or regional security issues, these projects are expected to proceed as planned.

There is also active movement to secure LNG carrier delivery slots. Since major LNG projects are scheduled to begin operations from 2029, shipowners and LNG industry developers are already making preparations. In addition to Venture Global, which is currently negotiating orders, Norwegian energy company Equinor (up to four carriers) and Woodside (16 to 20 carriers) are preparing as well. It has been reported that these companies are considering placing direct orders rather than chartering. Furthermore, if the delayed Mozambique LNG project by France’s Total (involving 17 carriers) resumes, LNG carrier slots could be quickly filled after 2029.

Although newbuilding prices have declined slightly, LNG carriers remain the most profitable vessel type. Jeong Yeonseung, a researcher at NH Investment & Securities, said, "While large LNG carrier orders have been sluggish this year, they are expected to account for half of next year’s order targets. If LNG carrier orders pick up in earnest, the performance improvement cycle for domestic shipbuilders could be extended from the previously expected 2027 to 2028."