- South Korea plans to localise LNG cargo tank technology to reduce reliance on foreign licensors.
- Shipbuilders face technical, commercial and diplomatic challenges in scaling domestic systems.
- Government support is seen as critical to move the technology onto large LNG carriers.
South Korea has announced plans to accelerate the localisation of LNG cargo tank technology, a move that could reshape the country’s LNG shipbuilding landscape. LNG cargo tanks are a core component of LNG carriers, as the fuel must be stored at –163°C, yet domestic shipbuilders have long depended on foreign technology, paying heavy licensing fees for each vessel built.
The Ministry of Trade, Industry and Resources recently confirmed the launch of a public-private working group to review localisation plans, including support through domestic ship orders. The government aims to share the financial and technical risks that have so far limited commercial adoption.
Domestic Progress, But Scaling Remains a Challenge
South Korean shipbuilders have already developed their own LNG cargo tank designs and tested them on small and mid-sized vessels, proving basic technical viability. However, applying these systems to large LNG carriers has remained difficult, mainly due to the lack of operational track records that shipowners require before committing to newbuild orders.
Past attempts to install locally developed tanks on large LNG carriers faced technical issues, creating caution across the industry and making shipowners hesitant to take on unproven designs.
Dependence on Foreign Technology Still Heavy
Despite domestic development efforts, South Korean shipbuilders continue to rely on foreign cargo tank technology for most LNG carrier projects. Licensing fees remain substantial, adding billions of won to vessel construction costs each year. In addition, the foreign technology provider maintains strict control over operational data and testing processes, limiting the freedom of local shipbuilders to innovate independently.
There are also concerns that aggressive localisation efforts could strain commercial relationships and disrupt LNG carrier ordering pipelines.
Industry Calls for Stronger State Support
Experts say meaningful localisation will require direct government involvement, including backing for large-scale demonstration vessels and preparation for potential legal or commercial disputes. Without this support, domestic cargo tank systems may struggle to move beyond niche applications.
Industry observers note that if successful, localisation could significantly improve cost competitiveness, strengthen supply-chain resilience and secure long-term leadership in LNG shipbuilding.
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Source – The Chosun Daily
