South Korea’s Hanwha Ocean is set to leverage its extensive experience in building liquefied natural gas (LNG) carriers by establishing operations in Pennsylvania. This move comes in response to new U.S. Trade Representative (USTR) regulations aimed at increasing the use of U.S.-built vessels for LNG exports, particularly in light of rising demand following geopolitical shifts in energy supply.
Hanwha Ocean plans to build LNG carriers in Pennsylvania to comply with USTR regulations.
The USTR’s new fee structure incentivizes the use of U.S.-built vessels for LNG exports.
Hanwha aims to construct five to seven U.S.-flagged LNG carriers by the end of the decade.
The company has a strong track record in LNG carrier construction, having delivered over 200 vessels.
USTR Regulations and Their Implications
The USTR has introduced a fee structure that includes a requirement for a portion of LNG exports to be transported on U.S.-built and operated vessels. This initiative is part of a broader strategy to bolster the domestic shipbuilding industry and ensure that U.S. energy resources are exported using American infrastructure.
Timeline of Requirements:
April 2029: 1% of U.S. LNG exports must be on U.S.-flagged vessels.
2031: Increase to 2%.
2040s: Reach 7%.
2047: Final target of 15%.
Failure to meet these requirements could result in the suspension of LNG export licenses, emphasizing the urgency for companies like Hanwha to ramp up domestic production capabilities.
Hanwha's Strategic Positioning
Hanwha Group, which entered the shipbuilding sector in 2023 through the acquisition of Daewoo Shipbuilding & Marine Engineering, has been proactive in positioning itself to meet these new demands. The company completed its acquisition of Philly Shipyard in December 2024, which will play a crucial role in constructing commercial vessels compliant with the Jones Act.
Key Achievements:
First shipbuilder to deliver 200 LNG carriers.
Historical milestones include the delivery of its first LNG carrier in 1995 and the 100th in 2016.
Holds a 57% market share in LNG carrier construction.
Future Outlook
As the U.S. emerges as a leading exporter of LNG, Hanwha’s initiative to build LNG carriers domestically is not only a response to regulatory changes but also a strategic move to capitalize on the growing global demand for LNG. The company’s expertise in shipbuilding, combined with its new facilities in Pennsylvania, positions it well to become a key player in the U.S. LNG market.
In conclusion, Hanwha Ocean’s commitment to building LNG carriers in Pennsylvania reflects a significant shift in the maritime industry, aligning with U.S. trade policies and the increasing need for energy independence. As the company prepares to meet the USTR’s requirements, it could pave the way for a new era of U.S.-built LNG transportation.
