According to South Korean media, cautious optimism is growing that its shipbuilding industry could benefit from rising tensions in the Middle East.
This stems mainly from expectations of stronger demand for vessels to transport LNG from the US, after Qatar suspended operations at its Ras Laffan plant on Monday.
“Korean shipbuilders can take advantage of the Strait of Hormuz blockade and the suspended LNG exports from Qatar,” DS Investment & Securities analyst, Kim Dae-seong told the Korea Times.
He predicted that Asian and European countries would turn to the US as an alternative source of LNG imports, given the mounting uncertainty over Middle Eastern supply chains.
“The recent crisis will likely lead to purchase agreements and final investment decisions on US LNG projects under the phase of front-end engineering designs,” Kim said. “Unlike Chinese shipyards relying heavily on orders from China and the Middle East, (South) Korean shipyards can benefit from an increase in shipbuilding orders for US projects.”
Michael Sabel, CEO of Venture Global LNG told investors that the company has the world’s largest amount of uncontracted LNG cargoes and is ready to help stabilise markets.
"With the largest available incremental LNG capacity in the world, the United States will play a critical role during this historic disruption in the market," he said during the company’s earnings call.
Yang Jong-seo, a senior researcher at the Korea Eximbank Overseas Economic Research Institute, said future orders for LNGCs will depend on how much the US can ramp up its LNG production.
He added that the key factor is whether the conflict continues into the Autumn, when heating demand typically pushes up global LNG consumption.
