Hanwha Seizes Chance to Build US LNG Tankers

A South Korean shipbuilder plans to construct the first US-built liquefied natural gas tanker, following sweeping recommendations from a US trade agency that would tax ships made in China and aim to combat the Asian nation’s dominance in the industry.

Hanwha Shipping’s expansion comes after the US Trade Representative on Thursday unveiled a proposal that would impose fees on Chinese-built vessels at US ports after a six month grace period. The plan also requires LNG carriers exporting US fuel to be flagged and built in the country. 

Under the proposal, as many as five to seven US-flagged, US-operated LNG carriers would be required before the end of the decade, said Ryan Lynch, vice president of commercial shipping at the company. Hanwha Ocean acquired US-based Philly Shipyard in June 2024.

The USTR requirement faces enormous challenges given there is no existing capability to build LNG carriers in the US, and the majority of the vessels are built in South Korea and Japan, with some in China. Less than 1 percent of global LNG carriers is currently US-flagged, according to an international group of LNG importers. 

A trade group representing US LNG companies is urging the agency to exempt the fuel carriers entirely, saying the action risks long-term contracts, would raise costs for global buyers and threatens the country’s position as the leading exporter of the fuel. 

“The proposed maritime restrictions – particularly the requirement to transport US LNG on US-built and flagged vessels – are simply not feasible,” Charlie Riedl, executive director at the trade organization Center for LNG, said in a statement. “There are no such vessels in existence today, and building them would take decades, making compliance impossible for the industry.”