South Korean energy and shipbuilding companies are gearing up for a quick ramp up of the US LNG market expected under a second Donald Trump administration, which has vowed to lift LNG industry regulations.
According to sources in the South Korean energy industry this week, POSCO is considering acquiring an LNG terminal in the US.
During his presidential campaigns, Trump pledged to lift restrictions on LNG production and export imposed under the Joe Biden administration. He also promised state aid for new LNG production facilities’ construction in the country.
The US’ LNG exports are forecast to grow to over 100 mill tonnes in 2025 from over 90 mill tonnes in 2023, and under the new Trump administration, LNG exports are expected to grow even more.
In October, the general trading and energy exploration unit of South Korea’s steel giant revealed a plan to move into the booming North American natural gas market.
At the time, it was said to be in the early stages of talks to acquire a US LNG terminal business, and the company official hinted that it would take some time before it takes over a US LNG terminal.
In the long run, POSCO International also plans to invest in other areas of the US natural gas value chain, including upstream, covering LNG exploration and production and midstream handling LNG transportation, storage and trade.
The US LNG terminal business has lower entry barriers than other natural gas businesses.
Another South Korean conglomerate Hanwha Group has already tapped the US LNG market after acquiring a 15% stake in NextDecade, which owns and operates LNG terminals.
Using its close ties with the US LNG terminal operator, Hanwha will probably try to win more LNGC orders, which are expected to surge in line with the growing LNG exports.
Its larger rivals, and Samsung Heavy Industries, are also gearing up for a new boom in the LNGC market by beefing up investments in up-to-date vessel technology to cement their leadership in the LNGC shipbuilding market.
The South Korean LNGC shipbuilding market, which has been enjoying a super cycle, is expected to make a huge jump driven by the thriving US LNG market.
Considering current LNGC order backlogs and future projects, more than 100 new LNGC orders are expected to be firmed up in the next two to three years, industry sources said.
