On March 18th, HD Hyundai (formerly Hyundai Heavy Industries Group) shipbuilding holding company HD Korea Shipbuilding Marine announced that it had signed a construction contract with shipowners in Oceania for three ultra large liquid ammonia transport ships (VLACs), with a total contract amount of approximately 486.9 billion Korean won (approximately 365 million US dollars).
These three new ships will be built by HD Modern Heavy Industries located in Ulsan and are scheduled to be delivered gradually before December 2027.
As of now, HD South Korea Shipbuilding Ocean has undertaken 72 ship and sea equipment orders this year, with a total contract amount of 8.75 billion US dollars (approximately RMB 62.98 billion), completing approximately 64.8% of its annual order target of 13.5 billion US dollars. This includes 6 large LNG ships, 20 VLGC/VLAC ships, 4 LPG ships, 26 product oil ships, 1 VLEC, 6 VLCC ships, 3 crude oil transport ships, 2 LCO2 transport ships, 2 automobile transport ships, 1 offshore platform upper module, and 1 FSRU.
It is worth mentioning that these three new ships are the sixth batch of VLAC orders undertaken by HD Korea Shipbuilding Ocean this year. On January 8, the company announced that it had signed two VLAC construction contracts with PascoGas, the Türkiye ship owner, with a total contract amount of 317.3 billion Korean won (about 241 million US dollars); On January 9th, the company announced the construction contract for four VLACs worth approximately $482 million signed with Qatar's state-owned natural gas transportation company Nakilat; On January 18th, the company announced the signing of two VLAC construction contracts with Greek shipowner Alpha Gas, with a total contract amount of approximately 333 billion Korean won (approximately 249 million US dollars); On January 22nd, the company announced the signing of three VLAC construction contracts with shipowners in Central and South America, with a total contract amount of approximately KRW 491.1 billion (approximately USD 366 million); On February 20th, the company announced the signing of two VLAC construction contracts with African shipowners, with a total contract amount of approximately 322.8 billion Korean won (approximately 241 million US dollars).
So far, HD Korea Shipbuilding Ocean has taken on a total of 16 VLAC orders this year, worth 1.944 billion US dollars, accounting for 22.2% of the company's total order amount, surpassing LNG ships and ranking first among all ship types. At the same time, Samsung Heavy Industry and Hanhua Ocean have each taken on two VLAC orders since the beginning of this year. As a result, the three major shipping companies in South Korea have also taken over all 20 VLAC orders completed so far this year. This type of ship has become another new "filial son ship type" in the South Korean shipbuilding industry besides LNG ships.
Korean industry insiders have stated that many international shipping companies are taking the lead in ordering VLACs as liquid ammonia is seen as a viable alternative to fossil fuels in the future energy supply chain. The advantages of liquid ammonia transport ships and South Korean shipping companies in the construction technology of LPG ships are similar, and they are high value-added ships no less than LNG ships. Like LNG ships, ammonia is transported in liquid form and liquefies at minus 33 degrees Celsius, with a dew point higher than LNG and hydrogen. To build ships capable of safely transporting large amounts of liquid ammonia, it requires both high technical capabilities and large-scale production facilities as well as high-level engineering management capabilities.
The prospect of orders for liquid ammonia transport ships is also very clear. Norwegian consulting firm Rystad Energy estimates that by the mid-1930s, the trade volume of clean ammonia will reach 76 million tons, four times the trade volume in 2020. The company stated that by 2050, the annual export volume of ammonia will exceed 120 million tons. Most of them will come from Africa and North America.
According to the South Korean industry, it is expected that the total order volume for global liquid ammonia transport ships will be 150-200 by 2035, with an average annual demand of around 20 ships. According to analysis, South Korean shipping companies occupy nearly 70% of the global market share of LPG transport ships similar to liquid ammonia transport ships, so they will be in a more favorable position in the battle for liquid ammonia transport ship orders.
A relevant person in the South Korean shipbuilding industry said, "South Korean shipping companies have technological advantages, so they can continue their high price order strategy. With an increase in orders for liquid ammonia transport ships ordered by shipowners, it is believed that such orders will be concentrated in South Korean shipping companies, providing new assistance for the three major South Korean shipping companies that are striving to improve their profits."
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