Samsung Heavy Industries Co., the world’s second-largest shipyard, received orders to build six liquefied natural gas carriers worth a total $1.2 billion as demand for the fuel surges, prompting a jump in the shares.
Seoul-based Samsung Heavy gained 3.6 percent to 45,650 won as of 10:49 a.m. on the Korea Exchange, set for the highest close since November 2007. Other shipbuilders also advanced. Hyundai Heavy Industries Co. climbed 0.7 percent. Daewoo Shipbuilding & Marine Engineering Co. advanced 2.8 percent. The Kospi Index (KOSPI) was little changed.
The record earthquake in Japan that crippled nuclear reactors has spurred increased demand for natural gas. Only 10 new LNG tankers have been ordered worldwide in the past three years, creating the smallest backlog among major commercial- vessel types, according to Mirae Asset Securities Co.
“Optimism about LNG vessel demand is driving many shipyards higher,” said Song Seong Yeob, a fund manager at Seoul-based KB Asset Management Co., which manages $21 billion in assets. “Higher oil prices are also boosting expectations for drilling facilities and vessels.”
Samsung Heavy will build four ships for Golar LNG Energy Ltd. (LNG) and two for a customer that wasn’t identified, the company said in an e-mailed statement today. Samsung Heavy has won about $4.7 billion worth of orders this year, it said.
Investment in the oil and gas industry, including drilling platforms, ships and tankers, may also accelerate as crude oil prices soar above $100 a barrel. Oil has advanced as the North Atlantic Treaty Organization escalated its air campaign over Libya and on concern unrest may spread to other energy-exporting countries in the Middle East.
STX Offshore & Shipbuilding Co. gained 1.6 percent. The company said on April 8 the value of an order it received in May 2008 increased to 308.4 billion won from 258.6 billion won after a client revised the contract.