LNG carriers tap more ECA support
Korean shipyards' order books having been filling up with LNG carriers since the pandemic and war in Ukraine. And ECA support for the sector continues to push this deal pipeline across the financial line.
South Korean shipping company PanOcean signed a $150.4 million K-SURE-backed loan to fund the purchase of an LNG carrier from HD Hyundai Heavy Industries at the end of last year. The 12-year loan was provided by three international banks, including Societe Generale.
Korean shipbuilders order books are filling up with a stack of LNG carriers under construction amid higher demand for the transitional fuel, especially from Europe and China. The three biggest shipyards: DSME, Korea Shipbuilding & Offshore Engineering (KSOE), and Samsung Heavy Industries, which control more than 70% of the global LNG tanker production, all face production capacity issues, with their berth slots through 2025 reportedly booked.
While ECAs retreat from oil and gas, LNG-related infrastructure and transport remain the favoured carbon-intensive assets for support. Since 2020, KSURE has backed $2.47 billion in oil and gas deals while Kexim supported $6.8 billion over the same period, according to TXF Intelligence.
In January 2023, Norwegian shipping firm Knutsen Group sealed financing for five new LNG carriers to be built in the Korean shipyards. K-Sure covered two loans worth around $315 million in total for three carriers with tenors of 13.5, 14.5, and 15 years on the respective ships. BNP Paribas, ABN Amro, and BPCE Group acted as MLAs on the loans. Kexim guaranteed and funded the final two ships in a deal worth $174.4 million. BNP Paribas, Kexim, and SEB acted as MLAs with tenors of 13 and 14.5 years
In total, 286 LNG carriers are on order globally until 2028 with 165 ships slated for delivery over 2024-2025. So expect more offshore tankers to be financed via ECA support over this year and next (more information on the LNG orderbook here).
