China, South Korea vie for advanced shipbuilding orders as battle of the supertankers heats up

China’s state-owned shipbuilder has been contracted to build a fleet of massive tankers for a Qatari oil and gas operator in a multibillion-dollar deal that further challenges South Korea’s dominance in the high-end shipping sector.

The order by QatarEnergy will see the China State Shipbuilding Corporation (CSSC) make 18 tankers with individual capacities of 271,000 cubic metres – 57 per cent larger than normal vessels that transport liquefied natural gas (LNG), CSSC said in a statement on Monday.

It added that the historic deal “symbolises China’s rapid advances in the research, development and capability for building ultra-large LNG tankers”, and those advances are “moving [China] toward a goal of leading the world”.

Saad Sherida al-Kaabi, CEO of QatarEnergy and also the minister of state for energy affairs, said at Monday’s deal-signing ceremony: “With a total value of almost US$6 billion for these ultra-modern, largest-ever LNG vessels by size, the agreement we signed today is the industry’s largest single shipbuilding contract ever.”

South Korea has long been known for making some of the world’s most advanced sea vessels, including LNG carriers and passenger cruise liners.

“South Korea is really worried,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis. “Too many new sectors are going China’s way.”

Korea’s Ministry of Trade, Industry and Energy said in early April that its country retook the title of world’s largest shipbuilder from China in the first quarter of 2024, in terms of new global orders, after losing it for three years. It cited orders for “eco-friendly and high-value-added ships” as a reason for the recent gain.