As Japanese shipping company Mitsui O.S.K. Lines (MOL) decided to significantly expand its liquefied natural gas (LNG) carrier fleet by 2035, Korea's shipbuilders are expected to benefit. Domestic shipbuilders have secured work for several years, but workloads are thin after 2028.
According to the shipbuilding industry on the 22nd, MOL plans to expand its LNG carrier fleet to 150 vessels by 2035. MOL currently operates 107 LNG carriers, meaning more than 40 newbuild orders could be placed. With the standard LNG carrier priced at $250 million (about 348.8 billion won) per vessel, newbuild orders could reach $10 billion (about 13.949 trillion won).
The newbuild LNG carrier market is split between China and Korea. According to the Clarkson Report, of the 311 LNG carriers ordered worldwide over the past three years, Korea won 69% and China 31%. LNG carriers are technically demanding, yielding about twice the profit of general cargo ships.
This year, MOL ordered five very large ethane carriers (VLECs) from Samsung Heavy Industries, and last year it also ordered LNG carriers from Samsung Heavy Industries. HD Hyundai Heavy Industries won orders in 2020 from MOL for three very large gas carriers (VLGCs). If the Office of the United States Trade Representative (USTR) imposes port entry fees on China-built ships calling at U.S. ports starting in October, preference for Korea-built ships is expected to grow.
Korean shipbuilders have recently seen a decline in LNG carrier orders. According to Korea Investment & Securities, the four domestic shipbuilders (HD Hyundai Heavy Industries, HD Hyundai Samho, Samsung Heavy Industries, Hanwha Ocean) are set to deliver 64 LNG carriers in 2027 and 37 in 2028.
A shipbuilding industry official said, "Orders for LNG carriers have recently declined, but many shipping companies, including MOL, are expected to increase their LNG carrier orders," adding, "If orders rise, domestic shipbuilders could benefit."