Orders for LNG vessels rise as industry makes huge progress

Chen Jun, general manager of a State-owned shipbuilding corporation's subsidiary in Shanghai, sought cooperation with major shipyards in Asia in the late 1990s to help build China's own liquefied natural gas, or LNG, carrier.

However, Chen and his colleagues were given the cold shoulder. They were even told by their Japanese counterparts there was no way Chinese shipbuilders would be able to build their own LNG carriers in the next 20 years.

Large LNG carriers are considered by the shipbuilding industry to be just as challenging to construct as aircraft carriers and luxury cruise ships.

In the late 1990s, Japan and South Korea dominated the LNG carrier construction market. As a result, Chen's company — Hudong-Zhonghua Shipbuilding (Group), a subsidiary of China State Shipbuilding Corp, or CSSC — searched for partners across Europe, and European shipbuilders expressed great interest.

In 1999, an agreement was reached between Hudong-Zhonghua and the French companies of Gaztransport & Technigaz, or GTT, for patent technology, and with Chantiers de l'Atlantique for design technology, Xinhua News Agency reported.

"The LNG carrier construction market shifted from Europe to Asia, but instead of cooperating with Chinese shipbuilders, other Asian shipyards wanted to continue dominating the sector," Chen said.

However, in 2008, Hudong-Zhonghua completed the maiden delivery of China's first self-built LNG carrier the Dapeng Sun, and such dominance ended.

Chen heads the giant ship manufacturer, which is located alongside the Huangpu River in Shanghai and has more than 20,000 employees. His enterprise has delivered more than 40 vessels, and last year it received orders to build 37 LNG carriers.

Thanks to the efforts of Hudong-Zhonghua and other Chinese shipyards, China has made huge strides in the LNG carrier sector. The country received more than 30 percent of new orders globally last year, up from 7 percent a year ago — making China a major player in LNG carrier building.

Chinese shipyards received a record 55 orders for LNG carriers last year, solid proof that the nation's shipbuilding industry has cashed in on soaring global demand for such vessels, making China an important player in global energy transportation.

As the world's largest shipbuilder, CSSC received 49 orders for LNG carriers last year, raising its global market share from less than 7 percent in 2021 to about 30 percent. Hudong-Zhonghua snatched the lion's share of 37 orders.

In a recent interview, People's Daily quoted Li Yanqing, secretary-general of the China Association of the National Shipbuilding Industry, as saying, "This achievement has ended the market domination of a few nations in building LNG vessels, launching a new phase in the gas carrier sector."