LNG Newcomer Mulls $3.8 billion 20-Vessel Order
According to Reuters CBI Energy and Chemical (CB&I), a little known investment firm, plans to order up to 20 LNG carriers, in a deal worth up to US$3.8 billion – a huge prospect to South Korea’s beleaguered shipbuilding sector and a massive boost to the global LNG carrier fleet.
CB&I, which is controlled by Australian and Canadian investors and has offices in Hong Kong, also disclosed in a statement to Reuters that it would be seeking to buy floating LNG production and import facilities as part of an ambitious plan for Africa and Asia.
The orders would be a major shot in the arm for South Korea's ailing shipbuilding industry, which has been hit by a collapse in new orders as global trade growth slows and after the slump in commodities prices in recent years.
CBI Energy would be taking advantage of low shipbuilding costs and cheap credit, that make it easier for newcomers to tap into a global switch towards cleaner sources of energy, LNG traders said. Depressed LNG prices are encouraging demand for the fuel, they added.
The company said in a statement to Reuters that "there is a need to custom-build specialty LNG carriers that will meet CBI's business needs."
"South Korea's LNG carriers are the best in terms of design, shipbuilding and delivery speed," an executive at CBI, who declined to be identified, told Reuters. "The shipbuilding industry is in a slump. This would be a stimulus."
