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‘Not easy’: Japan mulls building its own LNG carriers amid Iran energy crisis

China and South Korea dominate global production of vessels for carrying natural gas, but Japan now sees industry as key to its energy security

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A liquefied natural gas carrier is under construction at a shipyard in Geoje, South Korea. Japan may restart domestic production of LNG carriers, aiming to break into a market dominated by South Korea and China. Photo: Getty Images
Carol Yangin Beijing
As the US-Israel war on Iran strains global energy supplies, Japan is discussing reviving domestic production of liquefied natural gas carriers for the first time in more than half a decade to bolster its national security.
The move would see Japanese shipbuilders return to a market that is currently dominated by China and South Korea, as Tokyo looks to revitalise its maritime sector and shore up its energy security.
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Japan’s shipbuilding working group – comprising industry experts and government officials – discussed proposals for restarting domestic LNG carrier construction at a Thursday meeting hosted by the Ministry of Land, Infrastructure, Transport and Tourism, according to local trade media outlet Kaiji Press.

The nation’s two top shipbuilders – Imabari Shipbuilding and Oshima Shipbuilding – are in talks over cooperating on the project, which would see Japan build its first LNG carriers since 2019, Kyodo News reported on Saturday.

Japan has a chance to break into the LNG carrier market given its strong shipbuilding sector and large-scale LNG imports, according to Ralph Leszczynski, head of research at shipbroking and shipping services group Banchero Costa.

However, restarting LNG carrier production will not be easy, as it is a very niche and technologically advanced sector, he warned.

The market for LNG carriers is currently totally dominated by South Korea and China, with South Korean yards accounting for 86 per cent of vessels delivered between 2020 and 2025 and Chinese yards delivering the remaining 14 per cent, Leszczynski said.
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China has been ramping up efforts to capture a greater share of the LNG carrier market, as its shipbuilding industry shifts towards more tech-savvy vessels that offer higher profit margins.
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