A fierce competition is occurring between South Korea and China in the market for large liquefied natural gas (LNG) ships. China is looking to capture a larger market share by expanding its facilities and increasing the size of its ships, while the South Korean shipbuilding industry is striving to maintain its competitive distance by improving operational efficiency and advancing gas processing technologies.
LNG Market Statistics
According to analytical reports, a total of 82 large LNG ships have been ordered globally from the beginning of this year until October 6. Of these, South Korean shipbuilders have secured orders for 44 ships, which accounts for 53.7 percent of the market share. In contrast, Chinese shipbuilders have registered 35 ships with a 42.7 percent share. The gap between the two countries, which was 29 ships last year, has decreased to less than 10 ships this year.
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Expansion of Shipbuilding Facilities in China
China is developing its infrastructure for building LNG ships. Currently, five Chinese shipbuilders, including Hudong-Zhonghua Shipbuilding and Jiangnan Shipyard, are active in this field. Recently, Hengli Heavy Industry is also entering the LNG ship market and is constructing two large ships using the "build first, sell later" method.
Chinese shipbuilders are also increasing the size of their ships. Hudong-Zhonghua Shipbuilding, a leader in the construction of Chinese LNG ships, began building an LNG ship with a capacity of 271,000 cubic meters last June. Meanwhile, Korean shipbuilders are focusing more on 174,000 cubic meter ships.
Innovations in South Korea's Shipbuilding Industry
HD Hyundai Heavy Industries has increased loading efficiency by changing the structure of the cargo hold. The company has commercialized an LNG ship with three tanks, which uses only three tanks instead of the existing four. This change has increased the loading capacity of the ships from 174,000 cubic meters to 176,800 cubic meters.
Additionally, Samsung Heavy Industries is working to minimize losses in the LNG transportation process by introducing a self-developed re-liquefaction system for gas. This system can liquefy boiled gas using the gas itself as a coolant.
Experts believe that soon Chinese shipbuilders will not be able to replace the volume of South Korean shipbuilders, as LNG ships typically take between 3 to 4 years from order to delivery, and quality and delivery capabilities require validation.
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