The South Korean shipbuilder plans to construct the first US-built LNG tanker, following sweeping recommendations from a U.S. trade agency that would aim to combat China's dominance in the industry.
The proposal aims to bolster US maritime capabilities, with Ryan Lynch, vice president of commercial shipping at Hanwha Shipping, estimating a need for five to seven US-flagged, US-operated LNG carriers by the decade’s end. Currently, less than 1 percent of global LNG carriers are US-flagged, with most being constructed in South Korea, Japan, and other countries. The US lacks existing facilities to build such vessels, presenting significant challenges to meeting these requirements.
Hanwha Shipping’s plan aligns with efforts to strengthen US LNG export infrastructure. The company aims to leverage Philly Shipyard’s capabilities to develop LNG carriers, supporting the nation’s role as a leading LNG exporter. This move reflects Hanwha’s commitment to expanding its presence in the US market while addressing the growing demand for domestically built vessels.
However, industry stakeholders have raised concerns about the USTR proposal’s feasibility. Charlie Riedl, executive director at the Center for LNG, a trade organization representing US LNG companies, stated: “The proposed maritime restrictions - particularly the requirement to transport US LNG on US-built and flagged vessels - are simply not feasible. There are no such vessels in existence today, and building them would take decades, making compliance impossible for the industry.” The group argues that the requirements could increase costs for global buyers and disrupt long-term contracts.
The initiative highlights the complexities of enhancing US shipbuilding capacity for LNG carriers. Hanwha Shipping’s efforts at Philly Shipyard represent a step toward addressing these challenges, but significant investment and time will be needed to establish the necessary infrastructure. The proposal underscores the importance of balancing domestic production goals with the realities of the global LNG market.
Hanwha Shipping’s project at Philly Shipyard marks a significant development in the US maritime and energy sectors. By pursuing the construction of LNG tankers, the company aims to contribute to the nation’s energy export capabilities while navigating the evolving regulatory landscape. The outcome of these efforts will play a key role in shaping the future of US LNG transportation.
