U.S. Midterm Results Raise LNG Carrier Order Risks for Korean Shipbuilders

With Democrats securing victories in the U.S. midterm elections, analysts have raised concerns that the order outlook for liquefied natural gas (LNG) carriers — a key revenue source for South Korea’s shipbuilding industry — could weaken. Stricter licensing and permitting procedures for LNG export terminals in the United States could delay new projects and, in turn, vessel orders.

Kang Kyung-tae, a researcher at Korea Investment & Securities, assessed the potential impact of the U.S. midterm election results on South Korea’s shipbuilding industry in a report on Nov. 6. He identified three key factors: delays in LNG carrier orders, changes in opportunities to secure U.S. naval shipbuilding contracts, and growing demand for on-site power generation at data centers.

The biggest concern is a potential contraction in the LNG carrier order pipeline. As of the end of September, LNG projects worldwide targeting operations by 2032 represented a combined annual capacity of 478 million metric tons. U.S. projects accounted for 255 million metric tons, or 53.2% of the total. The United States represents the largest share of the LNG carrier order pipeline for South Korean shipbuilders, making vessel orders particularly sensitive to changes in project schedules there.

If greater Democratic influence leads to stricter environmental impact assessments and permitting requirements, project construction could be pushed back. In particular, delays in permitting and commercialization schedules for LNG export terminal projects along the U.S. Gulf Coast could also defer related vessel orders.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →