South Korea’s Posco International Corp has emerged with a requirement for a single LNG carrier newbuilding.
The company, which is the arm of steel-making giant Posco, is understood to have approached shipbuilders for quotations on an LNG newbuilding for delivery in 2025.
Shipowners are also being invited to participate in the exercise, but these will be limited to South Korean companies, sources said.
The Posco move emerged as owners and yards in South Korea have also been waiting for another piece of domestic business. State gas company Korea Gas Corp (Kogas) is expected to come to the market in a bid to renew its fleet as its chartered vessels' long-term contracts come up for renewal.
Those following Posco's newbuilding hunt admitted they are unclear as to how the company intends to deploy the vessel but expected it to be used to import LNG into South Korea.
Posco, which was the first to gain a licence to import LNG into South Korea as the country deregulated its gas business, has been restructuring and expanding its LNG interests as it shifts to become a global energy company focused on gas and power.
Last year, Posco transferred its LNG storage and terminal business to power generation affiliate Posco Energy.
Posco’s Gwangyang LNG terminal is the first facility of its kind in South Korea to be built by a private energy producer.
Last month, Posco Energy was granted a licence to gas-up and cool-down LNG carrier newbuildings before they are handed over to owners from shipyards. This is a service which had been lacking in South Korea.
The asset switch was part of a reorganisation aimed at growing its gas business and improving synergies within the group.
In return, Posco Energy moved its off-gas combined cycle power plants in Pohang and Gwangyang, which are fuelled by residual products from the steel-making process, to the parent outfit.
The group said the restructuring is part of Posco chief executive Jeong-Woo Choi’s "100 reform projects", which aims to advance Posco’s expertise in the LNG midstream business.
Choi said that as part of the reshuffle of this business, Posco International, which operates the company’s gas fields, would take over the LNG trading operations.
“The expected outcome of the whole process is [the] boosted competitiveness of Posco’s LNG midstream operation,” the company said.
Global aspirations
In August, Posco International appeared to show it was starting to move on its global trading ambitions when it was reported to have won a contract to supply LNG to Pakistan.
The company has also teamed with Kogas and other South Korean entities on a joint plan to expand LNG bunkering in the country.
Posco was contacted for this article but the company's spokesperson has yet to reply.
