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'Strong' LNG Demand Prompts Tanker Order

Golar LNG Ltd. has contracted to build four 160,000-cubic meter liquefied natural gas (LNG) carriers with Korea's Samsung Heavy Industries Co Ltd.

Three vessels are to be delivered in 2013 and one in early 2014 at a combined cost of about $800 million. Golar has an option to acquire another four vessels for delivery in 2013 and onward, the company said.

The company said it might consider a mixture of several employment opportunities for the vessels, including spot trading, employment within Golar Commodities for its own cargo trading activities, joint venture structures with LNG suppliers and possible long-term charters to third parties. Commitment within the floating storage and regasification unit segment for several of the ships seems realistic as well, the company said.

"The supply-demand balance for LNG shipping looks increasingly attractive," said Golar Chairman John Fredriksen. "It is clear from the continued strong global LNG demand and supply growth that a significant amount of new infrastructure, including shipping, will be required over the coming years."

Golar said it sees further opportunities in the new-build markets and is pursuing several other projects with the target of increasing its new building program.

Golar has options to include ice-strengthening/winterization of the ships as well as regasification equipment. The vessels are to be delivered with dual-fuel diesel electric engines, which are intended to be more efficient than steam turbines. The new engines will also have lower emissions levels.

The contracts were originally entered into by companies affiliated with Golar's largest shareholder, World Shipholding. Golar has acquired the new building contracts based on the original contracting terms.

Equity financing for the vessels is coming from the proceeds of an initial public offering of Golar LNG Partners.

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