Chinese shipbuilders have been awarded a contract to build a large fleet of natural gas carriers for a Qatari oil and gas operator, in a multi-billion dollar deal that will further challenge South Korea's dominance in high-end shipping.

    South Korea has long been known for building some of the world's most advanced seagoing vessels, including liquefied natural gas carriers and passenger cruise ships.

    "South Korea is really worried," said Alicia Garcia Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis.

    According to reports, South Korea's Ministry of Trade, Industry and Energy said in early April that in terms of global new orders, South Korea regained the title of the world's largest shipbuilding country from China in the first quarter of 2024 after losing it for three years. The Ministry of Trade, Industry and Energy cited orders for "environmentally friendly and high value-added vessels" as the reason for the recent growth.

    Qatar Energy needs tankers to transport liquefied natural gas found in the Middle Eastern country to overseas consumers, including China. A Qatar-built LNG tanker called Q-Max has a carrying capacity of 266,000 cubic meters, which is larger than the standard capacity of similar vessels.

    Qatar Energy announced an expansion of LNG production capacity in February, aiming to reach 142 million tons per year by 2030, up from 77 million tons per year currently produced, according to S&P Global Commodities.

    Qatar Energy cited rising global demand for liquefied natural gas as the reason for its push for expansion

    The newly ordered vessels are 344 meters long, 53.6 meters wide and 27.2 meters deep, according to China State Shipbuilding Corp. Qatar Energy said eight of the 18 vessels will be delivered between 2028 and 2029, while the remaining 10 will be delivered between 2030 and 2031.

    Leave-eric Easley, a professor of international studies at Ewha Womans University in Seoul, said the manufacturing of LNG tankers creates jobs in parts of South Korea and is "politically important for the national economy."

    "Korea is a peninsular country that is modernising rapidly on the back of export-led development, and shipbuilding is part of that national identity," Easley says.