The new shipbuilding program for LNG carriers associated with the Mozambique liquefied natural gas (LNG) project led by French energy giant TotalEnergies has officially announced a delay in deliveries, marking the seventh time the order has been extended.
The delivery date of a total of 17 LNG carriers ordered from South Korean shipbuilders Samsung Heavy Industries and HD Hyundai Samho based on the Mozambique LNG project has been officially postponed to the first quarter of 2028-2029, according to Trade Winds.
A total of 40 large LNG carriers are planned for the Mozambique LNG project. According to the Letter of Intent (LOI) signed by TotalEnergies in 2020 with Samsung Heavy Industries and HD Hyundai Samho, nine of the first 17 LNG carriers are to be constructed by HD Hyundai Samho, with Japanese shipowner MOL (5) and Kawasaki Kisen Kaisha (and 4) as the owners; Samsung Heavy Industries is in charge of constructing the remaining eight units, with Nippon Yusen Kaisha (4) and Greece’s Maran Gas Maritime (4) as the owners.
These 17 LNG carriers were originally scheduled to be contracted for shipbuilding in May 2021 with deliveries to start in 2023, but due to the deteriorating security situation in Mozambique, TotalEnergies declared force majeure and postponed the shipbuilding program.In 2022, TotalEnergies and the related shipowners negotiated again with the two South Korean shipowners on the booking of slots, and planned to confirm the order in July 2023, but it still ended in postponement.
In February this year, it was reported that TotalEnergies planned to place the order through the selected shipowners at the end of January 2024, but due to the delay of the project, the related shipbuilding program was also postponed to July 2024, and the delivery date of the LNG carriers has been formally postponed to 2028-2029, a delay of 5 years compared to the original 2023 delivery date.
Shipbuilding industry sources said that 14 of the 17 LNG carriers have already been determined to be delayed, including Samsung Heavy Industries eight new LNG carriers will be delayed from May and August 2024 to July to December 2028; HD Hyundai Samho’s delayed delivery time has not yet been determined all, with two delayed to November 2028, four delayed to February and March 2029, and the other three units will be delayed by three years compared with the original delivery period.
TotalEnergies earlier revealed that it is preparing to lift force majeure and is on the verge of reaching a new agreement with the contractors of the Mozambique LNG project, which it hopes to resume in the middle of this year.
The Mozambique LNG project is said to have begun in 2010 when a large amount of natural gas was discovered off the northern coast of Mozambique, with proven reserves alone amounting to 150 trillion cubic feet. The project, with a total investment of $20 billion, received its final investment decision (FID) in 2019. TotalEnergies will implement two projects with an expanded capacity of up to 43 million tons per annum (MTPA).
South Korea’s shipbuilding industry has a different view on the renewed postponement of the newbuilding program for the Mozambique LNG project. Some industry insiders said that the project delay has made it urgent for shipyards to seek new orders to fill the vacant slots, or else they will bear the loss of the original delivery date.However, some industry insiders believe that it may be news to shipyards if they are able to fill the vacant slots vacated by the project delays. Currently, the global shipbuilding boom is expected to continue until at least 2026, so shipyards are expected to get new ship orders quickly.
So far this year, Samsung Heavy Industries has taken orders for 15 large LNG carriers, with a total order value of about $3.47 billion, which are expected to be delivered by October 2028. While HD Hyundai Samho has contracted a total of six large LNG carriers ordered by Nakilat, a Qatari LNG shipping company (two) and an Oceania regional shipping company (four).