Hanwha Shifts Strategy: Reflagging Korean LNG Carriers to U.S. Registry

Hanwha Ocean’s U.S. shipping branch has revealed intentions to reflag liquefied natural gas (LNG) vessels built in Korea to the U.S. flag, as reported by Business Korea. This decision comes on the heels of new regulatory adjustments from the U.S. Coast Guard aimed at streamlining the reflagging process for foreign vessels looking to register in the united states. These changes are part of a broader initiative by the government to reclaim its maritime leadership adn speed up approvals for such applications.

The company’s American affiliate, Hanwha Shipping, stated that they are currently “conducting technical due diligence for this transition” and will adhere to the Option Compliance Program (ACP). This program allows foreign-built ships to operate under U.S. regulations, according to Business Korea.

This move seems well-timed with supportive policies towards South Korea; Wi Sung-lac, Director of National Security, highlighted president Trump’s strong interest in shipbuilding during discussions at last week’s NATO summit.

While these reflagged vessels can operate internationally under a U.S. flag, it’s vital to note that domestic operations are restricted by the Jones Act—this law prevents foreign ships from transporting goods between U.S. ports unless they meet specific criteria regarding ownership and construction.

This initiative is part of Hanwha’s broader strategy as it expands into American markets. In December 2024, they made headlines by acquiring Philly Shipyard—the first time a Korean shipbuilder has purchased an American shipyard—and announced plans for a $72 million investment aimed at modernizing this facility so it can produce up to ten vessels each year by 2035.

In April, an executive from Hanwha shared ambitions about building America’s first domestically constructed LNG carrier following proposals from the U.S. Trade Representative (USTR) that would impose taxes on Chinese-built ships as a countermeasure against China’s dominance in this sector.

However, some industry analysts have raised concerns about these proposed requirements’ practicality; experts from the Center for LNG have pointed out that enforcing restrictions—especially mandating that LNG carriers exporting American fuel be both flagged and built domestically—may not be realistic.

At present, Hanwha Shipping is actively preparing for this reflagging while keeping an eye on any legislative developments that could impact their ability to operate within domestic waters effectively.