Korea Shipbuilding & Offshore Engineering (KSOE) has mostly filled
its order book for the next 2-1/2 years as the pandemic drove demand
for container ships, leaving little room to meet the needs of the
liquefied natural gas (LNG) sector, a senior company executive said.

With U.S. LNG exports rising, more LNG carriers are traveling longer
distances to customers in North Asia and Europe while European
countries have snapped up floating storage and regasification units
(FSRUs) as they ramp up LNG imports to replace Russian gas supplies
in the wake of the Ukraine crisis.

However, shipyards in South Korea and China are unable to accommodate
demand for new LNG vessels as they work to meet a flood of orders for
new container ships following global supply chain disruptions and
port congestion that have held up ships in the United States and
China. This supports spot chartering rates for LNG carriers which
have hit all-time highs.

"A huge volume of new-build orders have taken up slots in China and
South Korean shipyards," K.W. Kim, senior vice president at Hyundai
Heavy Industries, flagship unit of the world''s largest LNG carrier
builder KSOE, told Reuters.

KSOE''s capacity is nearly full with orders stretching to 2025, he
said, adding that container ships and LNG carriers each account for
about 30% of slots. KSOE builds 20 to 22 LNG carriers per year.

South Korean shipyards are also struggling to operate due to labor
shortages while grappling with prices nearly doubling for key
material steel plates, Kim said.

"At this moment, we can''t receive new orders for FSRUs," he added.

In 2020, Qatargas and TotalEnergies had booked shipbuilding slots for
LNG projects in Qatar and Mozambique respectively, he said, while
U.S. LNG producers are also seeking more vessels as they ramp up
exports.

"Shipowners enjoy good charter rates," Kim said.

About half of the new-build orders for commercial vessels are for
ships equipped with dual fuel engines - either LNG or methanol - with
oil, he added. Hyundai Heavy is building container ships for A.P.
Moller-Maersk that run on methanol.

Kim said there is also a rise in demand for smaller oil tankers -
Aframax and Medium-Ranged sized vessels - as Europe looks to import
more oil products from elsewhere to replace Russian supplies.

(Reuters - Reporting by Joyce Lee and Florence Tan; Editing by Sonali
Desai)