South Korea's HD Hyundai Mipo has recently secured a major contract to build four liquefied natural gas (LNG) bunkering vessels for an undisclosed Asian shipping company. The deal, valued at approximately $370 million, highlights the continued investment in LNG infrastructure, as the maritime industry increasingly looks for cleaner fuel alternatives to comply with international environmental regulations. Each vessel will have a capacity of 18,000 cubic meters and is scheduled for delivery by October 2028.
The LNG bunkering market has seen rapid growth in recent years, driven by the International Maritime Organization’s (IMO) push to reduce sulfur oxide emissions. In 2022, the market was valued at nearly $800 million and is expected to reach $14.8 billion by 2030, growing at a staggering rate of 45.1% annually. Shipping companies are transitioning to LNG due to its lower sulfur content and reduced greenhouse gas emissions compared to traditional marine fuels.
Despite the optimism surrounding the LNG bunkering sector, the broader LNG shipping market is currently facing difficulties. An oversupply of LNG carriers has resulted in a steep drop in charter rates. Global LNG supply increased by only 2.5% last year, leading to an excess of available vessels. As a result, spot charter rates for LNG carriers have plummeted by over 90% since November 2024, falling to around $4,000 per day.
This imbalance between supply and demand has also impacted freight rates. Two-stroke engine LNG carriers with a capacity of 174,000 cubic meters have seen their rates drop to as low as $3,500 per day—an 82% decline since the start of 2025. With a growing number of vessels waiting for cargoes, the market is now facing one of its most challenging periods in recent history.
Looking ahead, the LNG bunkering market is expected to continue its upward trajectory, with more ports investing in LNG infrastructure and shipowners seeking long-term sustainability. However, the current oversupply of LNG carriers poses an ongoing challenge that will require strategic adjustments to stabilize shipping rates and maintain profitability.
HD Hyundai Mipo’s recent contract is a testament to the industry’s confidence in LNG as a viable marine fuel. While short-term market conditions may present hurdles, the long-term outlook for LNG bunkering remains positive. As companies navigate these market fluctuations, adaptability and innovation will be key to ensuring sustainable growth in the LNG sector.
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