LNG Ships 10%, Aged Vessels Over 20 Years

Expectations for Breakthrough in Domestic Shipbuilding Orders

Trend of Age Restrictions on Ships by Charterers

[Asia Economy Reporter Park So-yeon] As charterers increasingly avoid aging vessels, it is anticipated that this trend will act as a positive factor for orders in the domestic shipbuilding industry.

According to the International Gas Union (IGU) '2020 World LNG Report' released on the 3rd, among the 541 global LNG carriers currently in operation, about 10%, or 54 vessels, are aged over 20 years.

Recently, shipowners have been reducing the expected service life of LNG carriers to a minimum of 20 years in response to charterers' trend of imposing age limits on ships. While the average service life of vessels was previously considered to be around 35 years, it is now expected to shorten to 20-25 years, leading to a rescheduling of order plans accordingly.

The domestic shipbuilding industry expects the shortened ship replacement cycle to serve as a new breakthrough amid demand declines caused by the COVID-19 pandemic. The three major Korean shipbuilders have already invested early in eco-friendly vessels such as LNG carriers fueled by LNG, possessing world-class technological capabilities.

An industry official stated, "Demand for aging vessels with low efficiency and high carbon emissions is significantly decreasing," adding, "The accelerated ship replacement cycle will have a positive impact on domestic shipbuilders."