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South Korean state support by ordering LNG carriers

Tuesday, 27 Nov 2018

The South Korean government will order 140 liquefied natural gas (LNG) carriers by 2025 and provide 1.7 trillion won (US$1.5 billion) in financial aid to support the country’s depressed shipbuilding industry.

The shipbuilding assistance package was announced after a government meeting chaired by Prime Minister Lee Nak-yeon. Government measures in April were aimed to help large shipbuilders, the latest scheme is aimed more at small- and mid-sized shipbuilders, the government said. There are 78 such small yards in South Korea.
The government plans to order a total of 140 LNG vessels by 2025, a deal estimated to be worth about 1 trillion won. To start, it will replace two large emissions-emitting tug boats with cleaner LNG-fueled ships next year. It is also reviewing a mandate to direct all state-owned ships to shift to LNG propulsion from 2020, which would generate a series of modernisation orders. To aid financially-strapped shipbuilders and equipment makers, the government will also put aside a 700 billion won fund and extend maturing loans worth about 1 trillion won. Japan said it is complaining to the World Trade Organisation about state financial support given to Korean yards (New Ships 47/2018).

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