With South Korea-United States trade talks leading Korea Gas Corporation to decide to purchase a large volume of U.S.-made liquefied natural gas (LNG), expectations are building that orders for LNG carriers will increase. Domestic shipbuilders have strengths in building LNG carriers, while the United States is moving to require carriers used for LNG exports to be U.S.-made.
According to details the White House released on the 31st, Korea Gas Corporation signed long-term contracts with sellers such as Trafigura and TotalEnergy and decided to purchase an additional 3.3 million tons a year of LNG from companies including Cheniere in the United States. The corporation imported 5.64 million tons of LNG from the United States last year, and it is increasing that volume. The United States' LNG exports last year totaled 88.3 million tons, and Korea's total imports were 46.31 million tons.
In the shipbuilding industry, there is an expectation that new orders will emerge as the United States is moving to localize ships used for LNG exports. The Office of the United States Trade Representative (USTR) plans to mandate that 1% of LNG export volumes be transported on domestically built ships starting in 2028 and to expand that share to 15% by 2047. The last LNG carrier built in the United States entered service in 1980 and was scrapped in 2021, so there are currently no LNG carriers built and operated in the United States.
The industry projects that, under USTR rules, five to seven U.S.-flag LNG carriers will be needed by 2030. However, because building LNG carriers is difficult with the United States' current capabilities, cooperation with Korean shipbuilders that have entered the U.S. market is expected to be inevitable.
Hanwha Ocean, which entered the United States by acquiring the Philadelphia Shipyard, plans to invest $5 billion (about 7.1 trillion won) to boost local production capacity. HD Hyundai Heavy Industries and Samsung Heavy Industries also are set to make large-scale investments to strengthen local supply chains.
Kang Kyung-tae, an analyst at Korea Investment & Securities, said, "There are many projects remaining to order LNG carriers in the United States. The currently sluggish orders for LNG carriers are likely to resume from next year."