China and South Korea compete for core technology of LNG ship

Sources told Reuters on Monday that South Korea's Daewoo Shipbuilding, Hyundai Heavy Industries and Samsung Heavy Industries are considering bidding for GTT for 1 billion euros (about $1.27 billion). In addition, the shipbuilding department of the South Korean STX Group is also considering joining the bid. It is reported that because the risk of bidding by a single company is too large and no company can afford it, several shipyards in South Korea have already held a meeting to discuss whether they will jointly acquire GTT.

South Korea’s shipyards have an unprecedented unity to fight China. People familiar with the matter said: "Whether the Korean shipyard is acting alone or in a row, it is imperative to acquire GTT. They will never let the Chinese shipyard take over the company."

The French GTT is the leading company in the market for the manufacture of LNG storage tank film sealing systems for safe storage on board. The company licenses technology licenses to the shipyard, and each ship charges approximately $10 million. Although the Korean shipyard has been trying to develop its own LNG ship sealing technology, it is still far from the GTT in terms of technology, quality and safety.

Although the official bid has yet to be announced, there has not been any movement in the Chinese shipyards, but analysts believe that the Chinese side is bound to participate in the bidding. Industry experts said that if the three old enemy shipyards in South Korea insist on joint bidding, it will be the first time they have joined hands.

For the first time in 2009, China’s shipbuilding orders surpassed the long-term market leader in Korea. But last year, shipowners turned to order LNG ships and Other technically complex ships. In the first half of 2011, orders for sea-going dry bulk carriers fell by nearly 60%, while demand for LNG ships surged 11 times.