Posted - December 9, 2013 - Hellenic Shipping News Worldwide - Source: China Daily
China's hunger for natural gas has pushed its shipbuilding and energy
industries to build more liquefied natural gas carriers and import
terminals, to give the nation an edge over other countries.
"China will need more than 35 LNG carriers over the next two years to
meet its surging demand for natural gas," said Bao Zhangjing, director
of the China Shipbuilding Industry Research Center.
In 2012, the country consumed 147.1 billion cubic meters of natural gas and imported 42.5 billion cu m.
The Chinese government plans to raise the proportion of natural gas in
the energy mix from 4.5 percent in 2011 to 8 percent in 2015, to further
curb air pollution.
As the domestic production of natural gas is still fairly limited, China
may raise its natural gas imports to 80 billion cu m by 2015, the
energy research institute of China's National Development and Reform
Commission forecast in July.
Large energy companies such as China National Petroleum Corp and China
National Offshore Oil Corp have all bought new LNG tankers to support
their natural gas purchase overseas.
The Shanghai-based Hudong-Zhonghua Shipbuilding (Group) Co Ltd, a
State-owned enterprise and China's only manufacturer of LNG carriers,
delivered six LNG carriers to domestic and foreign buyers before 2010
and currently has 14 orders for different-sized LNG tankers, including
orders placed in August by British Gas Services Ltd and CNOOC Ltd.
"As China and developed markets such as Japan and the United Kingdom are
eager to obtain natural gas from abroad, LNG carriers are exactly what
they need," said Lou Danping, deputy chief engineer of Hudong-Zhonghua.
"Our LNG carrier-building capacity has grown along with their
consumption demand and imports of natural gas."
The technical content and added value of LNG carriers are much higher
than those of oil tankers, and they must be equipped with tanks that can
resist extremely low temperatures. The average life cycle for a LNG
tanker is between 40 and 45 years and its price range varies between
$250 million and $450 million, depending on the functions and size of
the ship.
"As China has become a hot marketplace for the consumption of natural
gas, having the ability to build LNG tankers independently means that
the country is capable of strengthening its energy security on the sea,"
Lou said.
To store the LNG from the international market, China is now operating
six LNG import terminals and eight LNG terminals are being built. CNOOC
said in September that it will build another five LNG terminals by 2015.
There are only 13 shipyards in the world that build such sophisticated
vessels. In 2012, there were about 100 LNG tanker orders placed by a
number of countries. South Korea gained 90 of them and China only won
four orders.
To grab more market share, Japan's Kawasaki Heavy Industries Ltd plans
to build LNG tankers in East China's Jiangsu province. The company has
set up Nantong COSCO KHI Ship Engineering Co Ltd, a joint venture
shipyard with China Ocean Shipping (Group) Co. It aims to have an annual
production capacity of two LNG carriers by 2018.
Also, to boost economic growth in a sustainable way, China's
shipbuilding industry is betting on LNG-powered ships amid rising
concerns over the marine environment and "green" government initiatives.
Last month, Jiangsu-based Tsujiu Heavy Industries Co Ltd delivered two
LNG ships to Nor Lines AS, a Norwegian shipping and logistics company.
The deal, worth about $90 million, was the first overseas delivery of
LNG ships by a Chinese company. The two LNG multipurpose cargo vessels
will be used in Norway's coastal regions.
"The Chinese government now has a clear plan to introduce LNG as fuel,
at 170 ships already got approval for conversion to LNG on the Yangtze
River and they're planning to build more bunkering stations," said Tor
Svensen, CEO of the maritime business at DNV GL, a major ship and
offshore classification society.
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