Korean shipbuilders kick off year with LNG carrier order spree

(HD Korea Shipbuilding & Offshore Engineering)

South Korea’s shipbuilding industry has kicked off the year with a string of orders centered on high-value vessels, led by liquefied natural gas carriers, as demand expands to large gas carriers and tankers.

According to industry sources on Sunday, HD Korea Shipbuilding & Offshore Engineering recently signed a contract worth 1.49 trillion won ($1.02 billion) with a shipping company in the Americas to build four LNG carriers. The deal includes options for an additional four vessels, raising expectations for follow-up orders.

Hanwha Ocean secured orders last month for seven LNG carriers worth 2.58 trillion won, while Samsung Heavy Industries won contracts in the same month for two LNG carriers valued at 721.1 billion won.

Industry watchers expect LNG carrier orders to increase this year after slowing last year due to high vessel prices and delays in final investment decisions for major LNG projects. Annual LNG carrier orders in 2025 totaled just 31 vessels, including seven for HD Korea Shipbuilding & Offshore Engineering, 13 for Hanwha Ocean and 11 for Samsung Heavy Industries.

Momentum has picked up this year as final investment decisions, particularly in the United States, have begun to materialize. According to Clarksons Research, global LNG carrier orders are projected to reach 115 vessels this year, driven by new LNG project development and replacement demand for aging fleets.

French engineering firm GTT has issued an even more aggressive outlook, estimating that around 150 new LNG carriers will be needed to transport output from already approved LNG projects.

LNG carriers are regarded as one of the most technologically demanding vessel types and remain a core strength of Korean shipbuilders. Industry officials say a significant share of new orders this year is likely to translate into contracts for domestic yards.

“While China’s LNG carrier construction capabilities are improving, a sizable technology gap remains among yards other than Hudong-Zhonghua Shipbuilding,” said Byun Yong-jin, an analyst at iM Securities. “Global LNG shipowners are unlikely to place a large number of orders with Chinese builders, meaning Korea’s dominance in LNG carriers should be maintained for the time being.”

The order momentum is also spreading to other high-value vessel types. Since the start of the year, Hanwha Ocean has won orders worth 572.2 billion won for three very large crude carriers from Middle Eastern shipowners. With the global VLCC fleet aging rapidly, analysts expect replacement-driven demand for newbuilds to continue.

“Domestic shipbuilders are steadily expanding their order books around high-value vessels that can be produced in Korea,” said Eom Kyung-ah, an analyst at Shinyoung Securities. “Securing early positions in regions where mid- to long-term vessel demand is expected to grow, including the U.S., will be crucial.”

Japan’s Mitsui O.S.K. Lines and India’s state-run Oil and Natural Gas Corporation (ONGC) are also reported to be in talks with Korean shipbuilders after forming a joint venture to order two very large ethane carriers. Canadian shipowner Seaspan is likewise reviewing potential orders for ethane carriers as it considers entering the ethane transport business.

Market research firm Research and Markets forecasts the global ethane market will grow to $21.45 billion by 2035.

The order upcycle is extending beyond major yards to mid-sized players as well. Daehan Shipbuilding recently secured orders for four Suezmax crude oil tankers this month, posting about 500 billion won in contracts and achieving 30 percent of its annual order target. Suezmax tankers are the largest vessels capable of transiting the Suez Canal when fully laden.