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LNG industry urges USTR to scrap shipbuilding clause

  • Märkte: Natural gas
  • 08.07.25

US LNG producers and trade associations filed comments with the US Trade Representative (USTR) calling for the agency to remove a protectionist proposal that would punish exporters and shippers that do not export a certain volume on US-built carriers.

The proposed rules, issued in April, mandate that a certain percentage of US LNG exports be shipped on US-built, -flagged and -crewed carriers, rising from 1pc in 2028 to 15pc in 2047. Under the initial proposal, a failure to comply with the rules would have been enforced by threatening to revoke LNG terminal export licenses, meaning that LNG terminal operators had the responsibility of ensuring compliance, instead of shippers.

A June proposal shifted the responsibility for meeting the targets to the shippers. But two trade groups, the American Petroleum Institute (API) and the Center for LNG (CLNG), filed a joint letter on 7 July urging the USTR to scrap the LNG-specific rules altogether. The US Chamber of Commerce and US LNG producers Cheniere and Freeport LNG wrote their own letters calling for the same.

Even if the responsibility to comply were passed on to shippers, the rules would harm the competitiveness of US LNG on the global market, the trade groups argued. The cost of building an LNG carrier in the US could reach $1bn per vessel, they wrote, compared to about $250mn for those built in South Korea, which has constructed about 77pc of LNG carriers in the global fleet. The shipowner would recoup those costs with higher freight rates, dimming the appeal of US cargoes in international markets.

Building LNG carriers in the US is also unfeasible due to the global sourcing of the components. For example, equipment used in LNG carriers is procured from Japan, South Korea, Germany, Italy, Sweden, France, Norway and the UK. It would take additional time to build out domestic manufacturing capacity for these key components.

The API included a slide detailing how modern LNG carriers are about 47m wide, 2m wider than the maximum capacity at the Hanwha Philly Shipyard in Pennsylvania.

The trade groups concluded that the USTR's proposal would run "counter to the Trump administration's goal of achieving energy dominance". The Chamber of Commerce argued that the shipping regulation would decrease US LNG exports and add to trade deficits, which the administration has made a priority to reduce.

Cheniere, the API and the CLNG also sought clarification on another section of the USTR proposal that adds fees for vessels owned or operated by Chinese entities. They urged the USTR to clarify that LNG vessels with existing sale and leaseback financing arrangements with Chinese banks are not subject to that rule.


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