Securing LNG Carrier Construction Capabilities in the U.S.
Taking the Lead in the North American Market
Mandatory Use of U.S.-Built LNG Carriers for U.S. LNG Exports
Proactive Response to Policy Changes
Hanwha Ocean (CEO Kim Heecheol) has signed a construction contract for one LNG carrier worth 348 billion KRW with its affiliate Hanwha Philly Shipyard, and has also secured an option contract for an additional vessel.
For this contract, Hanwha Philly Shipyard, as a U.S. shipyard, first signed a contract to build an LNG carrier ordered by Hanwha Shipping, another Hanwha Ocean affiliate, and then entered into a subcontracting agreement with Hanwha Ocean for the vessel's construction.
This project marks the first export-type LNG carrier ordered at a U.S. shipyard in about 50 years since the late 1970s. It is being pursued as part of efforts to rebuild the U.S. shipbuilding and shipping industries and to strengthen energy security.
In particular, its strategic value is significant because it allows for a proactive response to the U.S. federal government's policy, which will gradually require the use of U.S.-built LNG carriers for U.S. LNG exports starting in 2029.
Through this order, Hanwha Ocean has secured unrivaled technological capabilities and supply leadership in the North American LNG carrier market. In addition, as the only company in the world with production bases in both Korea and the United States, Hanwha Ocean plans to expand its ability to build LNG carriers in the U.S. by establishing a cooperative construction system with Hanwha Philly Shipyard.
Through this joint construction project, Hanwha Ocean will gradually transfer Korea's advanced shipbuilding technology to Hanwha Philly Shipyard, while Hanwha Philly Shipyard aims to expand its business into the high value-added ship sector.
In particular, this order is seen as a strategic move by Hanwha Shipping, allowing Hanwha Ocean to secure new business and Hanwha Philly Shipyard to acquire advanced technology, bringing both companies a step closer to entering the U.S. market.
While a significant portion of the LNG carrier construction will be carried out at Hanwha Ocean's Geoje facility, Hanwha Philly Shipyard will support certification processes and other requirements to meet U.S. Coast Guard (USCG) regulations and maritime safety standards.
If the vessel is to be registered as a U.S. ship, it is essential to meet USCG standards and complete certification, a process that Hanwha Philly Shipyard, with its extensive experience in building ships in the U.S., will lead. This project will therefore operate as a joint construction model between the two shipyards.
A Hanwha Ocean representative stated, "Hanwha Philly Shipyard has built more than half of the large commercial vessels subject to the Jones Act in the U.S., making it a key shipyard. This project will not only elevate Hanwha Philly Shipyard's technical capabilities by expanding into the advanced LNG carrier sector, but also serve as an opportunity to integrate Hanwha Ocean's global technology into the U.S. shipbuilding industry."
Hanwha Group established a bridgehead for entering the U.S. market by acquiring Hanwha Philly Shipyard for approximately 100 million dollars through Hanwha Ocean and Hanwha Systems in December last year.
Since then, Hanwha has been working to strengthen Hanwha Philly Shipyard's production capabilities by introducing smart systems, retraining personnel, and transferring technology. This LNG carrier order is expected to serve as a signal for the genuine rebuilding of the U.S. shipbuilding and shipping industries.
Hanwha Shipping plans to use the vessels it orders as platforms for the early adoption and demonstration of eco-friendly ship technologies. Beyond meeting some group-related demand, the company aims to play a key role in demonstrating and spreading eco-friendly technologies in the market, especially for existing shipowners who are reluctant to adopt high-cost, high-risk, and advanced technologies.
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