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HMD Gains Foothold in Small-Scale LNG Carrier Segment

Hyundai Mipo Dockyard (HMD) became Korea’s first shipbuilder to win an order for a small-to-medium-sized liquefied natural gas (LNG) carrier from a foreign shipping company, gaining momentum to pioneer the emerging small-scale LNG tanker segment.
HMD said on Thursday it has signed a contract with Norway’s Knutsen to build a 30,000㎥ LNG carrier for USD 77 million. This contract includes an option for a second vessel of the same specification, which means the shipyard can receive an additional order at a later date if the shipping company decides to exercise its option during the agreed-upon period.

The signing ceremony, held in Knutsen’s headquarters office based in Oslo, was attended by Hyundai Heavy Industries’ (HHI) President Ka Sam-hyun and Knutsen’s President Trygve Seglem along with others.

The vessel on order from Knutsen is 180 meters in length, 28.4 meters in width and 19.4 meters in depth, scheduled for delivery in the first quarter of 2021 to carry LNG from eastern Italy to Sardinia, a large island in the Tyrrhenian Sea.

In particular, the vessel will boast a shaft generator, often called “the green source of power,” which uses dual-fuel diesel electric propulsion systems and engines that can also run on boil-off gas and thereby significantly enhances operational efficiency.

“The level of trust we built over many years with HHI Group for a number of large-scale LNG carriers has naturally led us to choose HMD to construct a smaller tanker this time,” said an official of the Norwegian shipping company.

The LNG carrier market has been traditionally focused on large-scale vessels with capacity of 160,000㎥ or over, but a growing demand for LNG as an environmentally-friendly fuel and the expanding LNG bunkering infrastructure worldwide are combining to spur the rapid growth of the small-scale LNG tanker segment.

According to Clarksons, the UK-based shipbuilding market research company, the average number of small-scale LNG carriers on order per year across the globe remained around 5 for the past five years, but the number is likely to triple to 15 over the next decade.

“HMD is being highly recognized by clients for its technological edge, as is evident from the favorable comments we received from a shipowner for an LNG bunkering vessel recently delivered,” said an HMD official. “Building on this competitive advantage, we aim to secure a strong foothold in the market for LNG bunkering vessels and other small-scale LNG carriers down the road.”

The LNG bunkering vessel left HMD’s yard and was successfully delivered in October to German ship management group Bernhard Schulte.