대한조선주식회사

Jung Dae-sung challenges LNG propulsion ship orders based on the strength of Korean shipbuilding's medium-sized tanker

According to the shipbuilding industry, Daehan Shipbuilding is one of the potential shipbuilders for LR2 (Long Range 2) liquid cargo carriers (tankers) to be ordered by French energy company Total.

LR2 refers to Aframax (the most efficient size for freight) and Suez Max (the largest size that can pass through the Suez Canal). It is a so-called medium-large-sized liquid cargo carrier.

Unusually, Daehan Shipbuilding is mentioned with large shipbuilders such as Chinese shipbuilders, Korea Shipbuilding & Offshore Engineering, and Samsung Heavy Industries. It's because that Total wants the LR2-grade liquid cargo carrier to have LNG propulsion ship’s specifications.

Only large shipbuilders can build LNG-propulsion ships, and only three Korean shipbuilders (Korea Shipbuilding & Offshore Engineering, Daewoo Shipbuilding & Marine Engineering, and Samsung Heavy Industries) can meet the delivery deadline. It is an unknown area for medium-sized shipbuilders.

Considering this, it is unlikely that Korea Shipbuilding will receive an order for a total LR2-grade liquid cargo carrier. Tradewinds, a press media specializes in Ships and marine, predicted that Chinese shipyards would win orders. Because of the Chinese government's financial support for ships.

However, Chung is expected to do his best to obtain the order. Because Daehan Shipbuilding has patent technology for LNG propulsion ships and signed a memorandum of understanding about the construction of LNG carriers in 2014. In addition, the LR2 liquid cargo carrier is a competitive ship for Daehan Shipbuilding.

Daehan Shipbuilding ranked first in the global ship order market in 2015-2018.

As Chinese shipbuilders entered the order market for Aframax-class liquid cargo carriers with low labor costs in 2019, Korea Shipbuilding turned to Suezmax-class liquid cargo carriers.

Last year, Daehan Shipbuilding received more Suezmax-class orders than Aframax-class liquid cargo carriers, maintaining its two-year-old job. This fact ensures the stable operation of Daehan Shipbuilding.

Chung became the representative director of Daehan Shipbuilding in March this year. He Daehan Shipbuilding is maximizing its competitiveness in the LR2 liquid cargo carrier order market. Chung received orders for up to three LR2-grade liquid cargo carriers from European shipping companies for non-face-to-face operations even though shipowners and shipbuilders could not hold face-to-face meetings in May. As a result, Daehan Shipbuilding has maintained its two-year work.

Chung's good order results are even more meaningful because orders were received in the fog. Global orders for ships in May were 570,000 CGT. It downs by 46.2 percent from the same period last year. An official at Daehan Shipbuilding said, "Successive orders received after Chung took office demonstrated that Daehan Shipbuilding has excellent technology and competitiveness of quality.“ If Chung wins an order for a total LR2 liquid cargo carrier, Daehan Shipbuilding will be able to enter the LNG propulsion market.

According to a joint report released by the Korea Trade and Investment Promotion Agency (KOTRA) and the Industrial Bank of Korea (KDB), LNG propulsion ships are expected to account for 60.3 percent of global ship orders by 2025. LNG propulsion ships have the same fuel consumption as existing oil-fuel propulsion ships, but they emit fewer pollutants and reduce greenhouse gases by more than 20 percent. Orders are increasing as it is considered the toughest countermeasure to the recent tightening of environmental regulations on ships.

LNG propulsion ships are also more profitable than oil-fuel propulsion ships. Premium of LNG propulsion ship will be reflected in the construction price because it requires a separate LNG fuel tank from a dual fuel propulsion engine, which is more expensive than an oil-fuel propulsion engine.

Chung is confident in Daehan Shipbuilding's shipbuilding technology. he said, "We will lead the medium-sized liquid cargo ship order market with technology and quality in the face of difficult industry conditions." A total LNG-propelled LR2-grade liquid cargo carrier may be the beginning.