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US-Built LNG Carriers: Reality or a Distant Dream?
The prospect of reviving the US shipbuilding industry has come into focus again as the US Trade Representative (USTR) considers mandating that 1% of American LNG exports be carried on US-built LNG carriers starting in 2028, with the share to rise to 15% by 2047. However, industry experts warn that given the limited shipbuilding capacity and cost structure in the United States, realization in the near term will be difficult.
US Shipbuilding Capacity Falls Short of LNG Demand
US shipyards are currently unable to meet demand not only for LNG carriers but also for specialized tonnage required under the Jones Act. As a result, large-scale LNG projects in the US targeting final investment decisions (FID) in 2025–2026 are prioritizing contracts with Korean yards to secure vessels deliverable by 2030.
Global maritime and shipping consultancy Drewry assessed that “the idea of building LNG carriers in the US has limited viability, considering high newbuilding prices, Korea’s dominance in LNG carrier construction, and infrastructure constraints in the US shipbuilding sector.”
Orders Concentrated in Korean Shipyards
US project developers are already placing orders with Korean yards. Venture Global has contracted five LNG carriers with Hanwha Ocean and is reportedly considering up to 12 additional vessels for its CP2 LNG Phase 1 (10 mtpa) and Plaquemines LNG Phase 2 (10.7 mtpa) projects.
According to Drewry’s database, new US LNG projects slated to commence by 2030 are expected to add around 70 mtpa of liquefaction capacity. These projects will require substantial LNG carrier tonnage, but US yards alone cannot meet the volume or delivery timelines. A dual-track approach—leveraging both Korean and US capacity—appears inevitable.
Cost Gap Highlights Reality
At present, Korean shipyards command newbuilding prices of over US$260 million per LNG carrier, already above historical averages. By contrast, building in the US is estimated at US$500 million to US$1 billion per vessel—two to four times higher. Such a gap undermines the profitability of US LNG projects, reinforcing dependence on Korean shipyards.
Oversupply Risks and Intensifying Global Competition
The US plans to add more than 100 mtpa of LNG production by 2032–2033, but competition from Qatar (set to reach 142 mtpa by 2030), as well as new projects in Africa and South America, is unavoidable. If global supply outpaces demand, the economics of new projects could be challenged, making high-cost US-built LNG carriers appear even less feasible.
Korea’s Dominance Strengthened
As of August 2025, Korean shipyards hold more than 70% of the global LNG carrier orderbook. Industry forecasts suggest that as yard slots gradually expand into the 2030s, newbuilding prices will stabilize. With higher quality competitiveness compared to Chinese yards, Korean shipbuilders are expected to remain the first-choice partner for global LNG players.
Conclusion: Structural Limits Persist for US LNG Shipbuilding
The United States has not built an LNG carrier since the 1970s and continues to face constraints in skilled labor, technology, and infrastructure. Despite policy drivers, overcoming these challenges in the short term is unlikely. Ultimately, US LNG projects will rely on Korean-built LNGCs to secure competitiveness, while US-built LNG carriers remain, for now, more of a long-term aspiration than an imminent reality.
The article was provided by ASIASIS.
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