IMM PE Hyundai LNG Shipping Expands Global Market Presence

[Asia Economy Reporter Park So-yeon] IMM Private Equity (IMM PE) owned Hyundai LNG Shipping is poised to make a leap in the global market as a liquefied gas specialized shipping company unprecedented worldwide.

Recently, Hyundai LNG Shipping has been receiving significant attention in the LNG industry by rapidly responding to the global energy paradigm shift and successfully securing new LNG project contracts. Last year, after years of overseas expansion efforts, it successfully secured contracts for eight new LNG projects, solidifying its position as the number one in the domestic market and establishing a presence within the top 10 globally.

Since CEO Lee Gyu-bong took office in 2018 and established a growth strategy, Hyundai LNG Shipping has been attempting to become a global company based on approximately 30 years of LNG carrier operation experience accumulated since its predecessor, HMM Gas Shipping Division, internal competitiveness such as functions and organization required for LNG carrier management, and extensive project bidding experience.

The global market situation is also favorable. Due to the war between Russia and Ukraine causing a global energy crisis, European countries are reducing their dependence on Russian natural gas imports and significantly increasing the proportion of liquefied natural gas (LNG) imports via maritime transport. Additionally, as the necessity and importance of ESG management to transition from a fossil fuel-centered energy system to a renewable energy-centered system grow, corporate demand for LNG continues to increase.

With such a favorable global environment for the LNG industry, last year’s successful contracts between Hyundai LNG Shipping and Malaysia’s state-owned energy company Petronas for six 174K CBM LNG carriers, and with Spanish energy company REPSOL for two 174K CBM LNG carriers, have received high praise in the industry. These contracts represent the largest scale in Korea and are rare large-scale contracts overseas, as they were signed by a single company rather than a consortium of multiple companies.

The outlook remains bright. Major LNG exporting countries such as the United States and Qatar are simultaneously conducting large-scale LNG projects. The Qatari government plans to increase LNG production from the current annual level of 77 million tons to 110 million tons by 2025, and further increase it to 126 million tons by 2027. The United States expects LNG exports to surpass 90 million tons in 2023, driven by increased European LNG demand, representing about a 35% increase compared to the 67.03 million tons exported in 2021. Additionally, a total of 14 LNG export-related infrastructure developments are scheduled to begin sequentially from 2023.

Not only Hyundai LNG Shipping but also other shipping companies currently owning LNG carriers are seizing the global LNG market expansion as an opportunity and are consecutively succeeding in signing new contracts. In May 2022, a Korean consortium consisting of H-Line Shipping, Pan Ocean, and SK Shipping reportedly participated in the first bidding for the Qatar LNG project and secured transportation contracts for about 15 vessels. Recently, H-Line Shipping and SK Shipping signed transportation contracts for a total of seven vessels with Petronas.

A Hyundai LNG Shipping official stated, "Due to the increase in LNG demand from Europe and the global energy war, the LNG transportation market is expected to grow explosively," adding, "We will not be complacent with the achievements of 2021 and will participate in multiple ongoing LNG project bids. Furthermore, we will not neglect diversification into energy-related businesses such as LNG bunkering, LPG carriers, and FSRUs."

This content was produced with the assistance of AI translation services.