By Joyce Lee and Florence Tan

SEOUL (Reuters) – Korea Shipbuilding & Offshore Engineering (KSOE) has principally crammed its order e-book for the following 2-1/2 years because the pandemic drove demand for container ships, leaving little room to fulfill the wants of the liquefied (LNG) sector, a senior firm government mentioned.

With U.S. LNG exports rising, extra LNG carriers are travelling longer distances to prospects in North Asia and Europe whereas European nations have snapped up floating storage and regasification models (FSRUs) as they ramp up LNG imports to switch Russian gasoline provides within the wake of the Ukraine disaster.

Nevertheless, shipyards in South Korea and China are unable to accommodate demand for brand new LNG vessels as they work to fulfill a flood of orders for brand new container ships following world provide chain disruptions and port congestion which have held up ships in america and China. This helps spot chartering charges for LNG carriers which have hit all-time highs.

“An enormous quantity of new-build orders have taken up slots in China and South Korean shipyards,” Ok.W. Kim, senior vice chairman at Hyundai Heavy Industries, flagship unit of the world’s largest LNG provider builder KSOE, informed Reuters.

KSOE’s capability is almost full with orders stretching to 2025, he mentioned, including that container ships and LNG carriers every account for about 30% of slots. KSOE builds 20 to 22 LNG carriers per 12 months.

Shipyards are additionally struggling to develop as a consequence of labour shortages whereas grappling with a greater than 15% improve in costs for key materials metal plates, Kim mentioned.

“At this second, we will not obtain new orders for FSRUs,” he added.

In 2020, Qatargas and TotalEnergies had booked shipbuilding slots for LNG initiatives in Qatar and Mozambique respectively, he mentioned, whereas U.S. LNG producers are additionally searching for extra vessels as they ramp up exports.

“Shipowners take pleasure in good constitution charges,” Kim mentioned.

About half of the new-build orders for business vessels are for ships geared up with twin gas engines – both LNG or methanol – with oil, he added. Hyundai Heavy is constructing container ships for A.P. Moller-Maersk that run on methanol.

Kim mentioned there’s additionally an increase in demand for smaller oil tankers – Aframax and Medium-Ranged sized vessels – as Europe appears to be like to import extra oil merchandise from elsewhere to switch Russian provides.