Gas
Korean shipbuilders target floating LNG terminals
South Korean shipbuilders are positioning themselves to convert aging liquefied natural gas carriers into floating storage and regasification units.
Key points
- HD Hyundai Marine Solution and Hanwha Power are advancing FSRU conversion projects for older LNG carriers.
- The International Gas Union notes that FSRUs require less construction time and smaller initial investments than onshore terminals.
- Growing numbers of inefficient 1990s and early 2000s LNG carriers nearing scrapping age are driving interest in conversions.
What happened
South Korean shipbuilders are turning their attention toward converting older liquefied natural gas (LNG) carriers into floating storage and regasification units (FSRUs), according to ChosunBiz. An FSRU acts as an offshore LNG terminal that stores gas on a vessel before converting it for onshore delivery. HD Hyundai Marine Solution has finished the primary design work for an FSRU conversion project initiated in September of last year, while Hanwha Power is nearing completion on converting a 145,000 cubic metre LNG carrier.
According to the International Gas Union, FSRU projects offer shorter construction timelines and lower initial investment burdens compared to traditional onshore infrastructure. Rising demand from emerging LNG importing nations in Asia, many of which require smaller import volumes, is supporting this shift. The International Gas Union reported that six out of eight new LNG importers anticipated over the next three years plan to utilise FSRUs, projecting that the total number of FSRU-importing countries will reach 20 by 2030.
Market drivers and challenges
Additional momentum comes from the aging profile of the global LNG fleet. Vessels constructed during the 1990s and early 2000s generally have five to ten years remaining before reaching standard scrapping ages of 35 to 40 years. These older carriers exhibit lower energy efficiency and higher fuel consumption by modern benchmarks. SK Securities analyst Han Seunghan noted that conversion offers a more viable commercial pathway than scrapping.
Despite these dynamics, South Korean shipyards have secured few direct orders in the conversion segment thus far. Strong existing order books and competition from overseas offshore infrastructure specialists mean that international firms have won all FSRU conversion contracts awarded this year. Nevertheless, industry analysts suggest that domestic yards must prepare track records to capture potential medium- and long-term demand.
Why it matters
For African energy markets and gas exporters, the expansion of the FSRU conversion market presents notable infrastructure implications. Floating regasification units can accelerate import capabilities for developing nations without the capital-intensive and prolonged construction phases associated with land-based terminals. As global gas markets adjust, with Henry Hub gas spot prices standing at 3.1 US dollars per MMBtu as of October 2026 according to US EIA data, flexible import solutions such as converted FSRUs may influence regional supply chain dynamics and provide new avenues for monetising gas resources across emerging economies.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
25.8% of electricity in South Korea came from gas in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
