As the United States orders icebreakers from Finland to open Arctic routes, some analysts say Korea's shipbuilding industry could be sidelined from the Alaska liquefied natural gas (LNG) project. Korea specializes in icebreaking LNG carriers that can both transport cargo and break ice, while Finland mainly builds icebreakers that only break ice. If the Alaska LNG project consolidates a pipeline to an ice-free port to ship LNG, Finnish icebreakers may be more suitable.
According to the business community and the shipbuilding industry on Oct. 19, the United States has not yet asked Korea whether it will bid for icebreakers for the Alaska LNG project. Hanwha Ocean and Samsung Heavy Industries have world-class icebreaker construction capabilities. Hanwha Ocean developed the world's first icebreaking LNG carrier and successfully delivered 21 icebreakers deployed to the Yamal project in Russia's Arctic. Samsung Heavy Industries also won an order in 2005 for the world's first bidirectional icebreaking tanker.
The United States has placed an order with Finland for icebreakers for the Alaska LNG project. U.S. President Donald Trump said during a summit with Finnish President Alexander Stubb at the White House on Oct. 9 (local time) that the United States would purchase 11 Finnish icebreakers. The total cost is estimated at $6.1 billion (about 8.7 trillion won).
Finland is an advanced nation in icebreakers. As of last year, Finland designed about 80% of the world's icebreakers, and most were produced in Finland. A shipbuilding industry official said, "Because Finland is located in the polar regions, the icebreaker industry has developed to open routes."
The Alaska LNG project extracts natural gas from the Prudhoe Bay gas field at the northern tip of Alaska, transports it by pipeline to an ice-free port near Anchorage, liquefies it, and exports it to Asia and elsewhere. A pipeline must be installed along the 807-mile (about 1,297 km) section running north to south through Alaska, and infrastructure such as a liquefaction terminal must be built, with initial capital alone estimated at $45 billion (about 64 trillion won).
A shipbuilding industry official said, "If natural gas is loaded directly onto ships in Alaska, Korea's icebreaking LNG carriers would be suitable, but if natural gas is transported by pipeline, Finnish icebreakers that only break ice would be sufficient." A business community official said, "Given the business structure revealed so far, it does not appear to have a strong connection with Korea's shipbuilding industry."
The Alaska LNG project continues to draw criticism that its business viability is uncertain. U.S. companies such as ExxonMobil already withdrew investment in 2016. Alex Munton, an analyst at U.S. energy consulting firm Rapidan, analyzed that even excluding the cost of building the 800-mile pipeline, phase two would cost $60 billion (about 85 trillion won).
A shipbuilding industry official said, "Special-purpose vessels such as icebreakers do not have a formed market, so if the buyer cannot take delivery, it is not easy to sell them elsewhere. There have been cases where ships were ordered and the project fell apart, so the financial strength of the buyer is important."