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$3 billion worth of U.S. LNG: Can K-shipbuilding land a 12-carrier deal?

Published: 15 Apr. 2025, 19:56 Updated: 16 Apr. 2025, 15:09

A view of HD Hyundai Heavy Industries' Ulsan shipyard [HD HYUNDAI]

Venture Global, a U.S. liquefied natural gas (LNG) producer, is reportedly in talks to order up to 12 LNG carriers and has recently visited Korea’s three major shipbuilders to discuss potential deals.

Venture Global officials toured the shipyards of HD Hyundai Heavy Industries, Hanwha Ocean and Samsung Heavy Industries during their recent visit to Korea, shipbuilding industry insiders said Tuesday.

According to industry insiders, a deal could be finalized as early as the end of June. The company is first expected to sign a contract for four LNG carriers with a capacity of 174,000 to 180,000 cubic meters (6.14 million to 6.36 million cubic feet) each and then add an option for eight additional vessels. The total contract value could reach up to 4.3 trillion won ($3.01 billion).

LNG Approvals Give Korean Builders a Boost

Since the beginning of the year, the Trump administration has approved a series of LNG export projects. Key developments by Venture Global, Commonwealth, Delfin and Golden Pass have all received a green light, signaling a push by the United States to expand energy exports.

Korean shipbuilders are anticipating that other U.S. LNG developers may also place orders in the near future.

Clarksons Securities, a shipbuilding and shipping analysis firm, projects global demand for LNG carriers could reach as many as 126 vessels by 2029. With each ship costing an average of $256 million, the total market value could top 40 trillion won.

Korean shipbuilders currently dominate the global LNG carrier market. Of the 750 LNG carriers in operation, 90 percent were built in Korea. Korean yards secured 70 percent of all new LNG carrier orders worldwide last year. LNG ships require more advanced technology than container ships due to the complexity of the cargo containment systems.

Hanwha Ocean's shipyard [HANWHA OCEAN]

U.S. Pressure on Chinese Shipbuilding Benefits Korea

Tensions between the United States and China have also created opportunities for Korea’s shipbuilders. The U.S. Department of Defense has blacklisted China State Shipbuilding Corporation, and rising geopolitical friction has led global shipowners to shy away from Chinese yards.

In March, Korea overtook China in global ship orders, securing 820,000 compensated gross tons (CGT), or 55 percent of the global total of 1.5 million CGT across 58 vessels. China followed with 520,000 CGT, or 35 percent.

Chinese shipbuilders are seeing a sharp drop in orders. Shipping news outlet TradeWinds reported Tuesday that China’s bulk carrier orders fell to just 13 vessels in the first quarter, citing data from shipbroker Howe Robinson Partners.

This marks the lowest figure since 1993 and a 90.9 percent plunge from the 143 orders placed during the same period last year. Bulk carriers, which transport commodities like steel and coal, have traditionally been a stronghold for Chinese shipbuilders, accounting for nearly 60 percent of orders last year.

The decline suggests U.S. efforts to curb China’s shipbuilding industry may be having an effect. In January, the U.S. Trade Representative announced that Washington was considering fees of up to $1.5 million on Chinese-built ships entering U.S. ports.

“A growing number of countries, particularly the United States, are visiting the shipyards to explore orders,” a Korean shipbuilding industry official said. “Shipbuilding is rapidly emerging as a key sector for strategic cooperation across economic and security dimensions.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY PARK YOUNG-WOO [[email protected]]