South Korea pushes to localize LNG ship equipment
· UPIJune 29 (Asia Today) -- South Korea's major shipbuilders remain global leaders in the construction of liquefied natural gas carriers, but their continued reliance on foreign technology for some critical equipment presents a challenge as competition from China intensifies.
HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean and Samsung Heavy Industries have secured a strong position in the global market for high-value LNG carriers.
Building more ships, however, does not necessarily mean that South Korea has secured full control of the technologies and supply chains needed to produce them. Some critical components and systems are still supplied under foreign licenses or imported from overseas companies.
HD Korea Shipbuilding & Offshore Engineering's recent development of a domestically produced high-pressure LNG fuel pump is therefore significant beyond the introduction of a single product. The project represents an effort to expand South Korea's marine equipment industry and reduce its dependence on foreign suppliers.
The company recently obtained type approval for the high-pressure pump, which supplies LNG fuel to ship engines at the required pressure.
HD Korea Shipbuilding & Offshore Engineering developed the pump, while South Korean small and midsize equipment companies Pretech and Sungmoon participated in its production and packaging.
The company has secured supply contracts covering more than 70 vessels from South Korean and overseas shipyards.
The newly approved pump is designed for LNG-fueled vessels rather than an LNG carrier's cargo-handling system. Still, its development illustrates the broader need to localize equipment used in advanced gas-powered and gas-carrying ships.
South Korean shipbuilders are increasing their efforts to develop domestic equipment as global competition in the LNG-carrier market becomes more intense.
Chinese shipyards are narrowing the technology gap while using lower prices to compete for orders. Of the 22 LNG carriers ordered worldwide in January, Chinese shipyards secured 13 and South Korean yards won nine, according to Clarkson Research data cited by the industry.
Japan is also preparing to rebuild its LNG-carrier construction capacity after a seven-year hiatus. Japanese shipbuilders are considering a production framework that could eventually build three to five LNG carriers annually.
The return of Japanese shipyards would add another competitor to a market that South Korean companies have dominated for years.
South Korea's vulnerability is particularly visible in LNG cargo containment systems, which keep natural gas in liquid form at approximately minus 260 degrees Fahrenheit during transportation.
French engineering company GTT dominates the global market for membrane-type LNG containment technology. South Korean shipbuilders generally pay royalties when they construct vessels using its licensed designs.
The arrangement increases construction costs and demonstrates that leadership in shipbuilding does not always mean ownership of all the underlying technologies.
South Korea has developed its own cargo containment systems, but wider commercial adoption remains a challenge because shipowners tend to favor technologies with long operating records.
The high-pressure fuel pump developed by HD Korea Shipbuilding & Offshore Engineering was also previously an area led by overseas suppliers.
Dependence on foreign manufacturers can create problems when supply chains are disrupted. It can affect delivery schedules and make maintenance, repairs and replacement parts more difficult to obtain.
Domestic production could provide shipyards with more control over delivery schedules, technical support and long-term maintenance.
South Korean shipbuilders called on the government to support the marine equipment industry when the Shipbuilding-Shipping Shared Growth Strategy Council was launched in April.
Choi Sung-an, vice chairman and CEO of Samsung Heavy Industries, told Industry Minister Kim Jung-kwan that South Korean builders remained dependent on overseas suppliers for major equipment, including cargo pumps and liquefaction systems used in LNG carriers.
Choi said domestic manufacturers need opportunities to install their products aboard operating vessels so the equipment can establish performance records and gain the confidence of shipowners.
Developing technology in a laboratory is not sufficient for commercial success in the shipbuilding industry. Equipment must undergo certification, installation and extended operation at sea before global customers are likely to adopt it.
The next stage of competition may therefore depend less on which country receives the largest number of ship orders and more on which country controls the critical technologies and equipment within those vessels.
The domestically produced high-pressure pump is one step toward strengthening South Korea's marine equipment supply chain.
However, broader cooperation among shipbuilders, equipment manufacturers, research institutions and the government will be needed for South Korea to preserve its competitiveness as Chinese shipyards expand and Japan prepares to return to the LNG-carrier market.
-- Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260629010010095