Korea Gas Corporation Expands LNG Bunkering Business

Korea Gas Corporation (KOGAS) is accelerating the expansion of its LNG bunkering business. LNG bunkering, which is to supply LNG to ships on the sea, is regarded as a future growth driver of the global maritime industry as it can help gas companies to effectively respond to regulations.

KOGAS announced on May 22 that it would work with the Ministry of Trade, Industry & Energy and the Ministry of Oceans & Fisheries in the field of LNG bunkering so that related laws and regulations allow the use of LNG as a ship fuel in 2020 and later.

At present, KOGAS is doing LNG bunkering business on a truck-to-ship basis by supplying ships with LNG by means of its LNG receiving terminals located in Pyeongtaek and Tongyeong. Its LNG bunkering infrastructure is expected to be expanded once a bunkering vessel and a loading facility in Tongyeong are completed late next year. The KOGAS is also planning to cooperate for marketing with industry leaders such as Royal Dutch Shell and Mitsui.

The global LNG bunkering demand is estimated to reach 20 million to 30 million tons a year in 2030. According to Lloyd’s Register, up to 1,962 LNG ships are forecast to be built until 2025, accounting for 12.6% of the total shipbuilding volume.

South Korea is currently running only two LNG-powered ships. The Incheon Port Authority is running the Econuri with a tonnage of 260 tons and POSCO is running the 50,000-ton Green Iris for limestone transport. POSCO and the Korea South-East Power Corporation are considering introducing additional LNG-powered vessels for iron ore and coal transport, respectively.

The South Korean government, in the meantime, is planning to invest 600 billion won until 2025 in order to equip the Port of Busan with LNG bunkering facilities and build an offshore LNG bunkering terminal near the Port of Ulsan.