Korean Conglomerate Hanwha Shipping Orders First US LNG Carrier
(Bloomberg) -- Hanwha Shipping, the American subsidiary of Hanwha Ocean, ordered a liquefied natural gas vessel from its affiliate Hanwha Philly Shipyard, marking the first US LNG ordered ship since the late 1970s, the company said.
The vessel would cost at least $250 million, plus additional considerations depending on the final contract details between Philly Shipyard and Hanwha Ocean, Ryan Lynch, president and chief executive officer of Hanwha Shipping, said in an interview with Bloomberg News on Monday.
The order for the new carrier comes as the US Trade Representative released wide-ranging policies to target Chinese shipbuilding. The April policies included a requirement for a certain portion of LNG vessels to be built in the US over the next few decades, a provision that was opposed by energy trade groups over the lack of shipbuilding capacity and potential additional cost. The agency said in June that it would consider some modifications to the policy, although no time-line has been provided on when the final ruling would be made.
READ: Korean Shipbuilder Hanwha Seizes Chance to Build US LNG Tankers
The vessel would be 174,000 cubic meters in capacity, equipped with a GTT containment system and an engine known as M-type, electronically controlled, gas injection, or MEGI system. The contract specifies one LNG carrier and one option for an additional vessel, which is considered standard in shipbuilding contracts.
A “significant portion” of the ship’s construction would take place in Hanwha Ocean’s Geoje shipyard in South Korea. Hanwha Philly Shipyard, which was acquired by the Korean conglomerate last December, would be responsible for US regulatory compliance and safety certifications.
Lynch said that the order was the first step in creating a demand signal for the US LNG-built tankers. Finding sufficient mariners to crew a US LNG tanker is the next goal, which could take a number of years, he said.
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