Japan Moves to Resume LNG Carrier Construction, Seeks Technology Cooperation with South Korea

LNG carrier built by Samsung Heavy Industries [Photo: Samsung Heavy Industries]

Japan is set to resume the construction of liquefied natural gas (LNG) carriers, which has been effectively halted since 2019. The country is also considering seeking technology cooperation from South Korea's shipbuilding industry, which has secured a competitive edge in the LNG market.

According to the Nihon Keizai Shimbun, the Japanese government plans to initiate a project involving three shipyards—Imabari Shipbuilding, Kawasaki Heavy Industries, and Namura Shipbuilding—to construct three to five LNG carriers annually starting around 2035. This initiative will be included in a public-private investment roadmap that the government aims to finalize this month.

This plan is part of Japan's broader growth strategy to develop 17 strategic sectors, including artificial intelligence, semiconductors, and shipbuilding. In the shipbuilding sector, restoring the capability to construct LNG carriers is a key support project being considered for economic security.

While Japan has a history of building LNG carriers, it has fallen behind South Korea and China in the competitive landscape dominated by large LNG carriers and membrane-type cargo tanks. Since the last LNG carrier was delivered in 2019, new construction in Japan has virtually ceased.

To address its technological shortcomings, the Japanese government and shipbuilding industry are exploring options to request LNG carrier technology cooperation from major South Korean shipbuilders. They also plan to seek collaboration with French companies that possess core LNG tank technology.

Japan's renewed focus on LNG carrier construction is driven by concerns over energy supply chains. The country relies heavily on imports for LNG, which is used for power generation and city gas, making maritime transport stability crucial for energy security due to its island nation status.

However, it may be challenging for Japanese shipbuilders to regain price competitiveness against South Korea and China in the short term. Reports suggest that the Japanese government is considering providing subsidies to domestic shipowners to offset the price difference between Japanese and foreign-built LNG carriers.

In the South Korean shipbuilding sector, there are mixed assessments regarding this cooperation and competition dynamic. If Japan collaborates with South Korea, it could retain some LNG carrier demand that might otherwise shift to China. However, if Japan successfully restores its construction capabilities with government support, the competitive landscape in the high-value ship market could become more complex in the long term.

* This article has been translated by AI.

AJP