SK Gas, H Line Shipping, and Ulsan Port Authority Sign Public-Private Partnership MOU for LNG Bunkering

Business Operations at Ulsan Bukhang Port

SK Gas, domestic shipping company H-line Shipping, and Ulsan Port Authority (UPA) announced on the 16th that they have signed a Memorandum of Understanding (MOU) to promote the LNG (liquefied natural gas) bunkering business.

The signing ceremony, held at the H-line Shipping headquarters in Jongno-gu, Seoul, was attended by SK Gas Vice President Baek Heum-jeong, H-line Shipping General Manager Sun Young-hoon, Ulsan Port Authority Vice President Jeong Soon-yo, and other representatives from the three companies.

This MOU is significant as it marks the first LNG bunkering business promotion through cooperation between private companies and public enterprises. As a key national project preparing for the energy transition era, the strategy is to mobilize all means by combining private and public efforts to establish South Korea as a global LNG bunkering hub.

LNG bunkering refers to supplying LNG as fuel to ships. In line with the global carbon neutrality trend, demand for LNG bunkering, a low-emission energy source, is expected to exceed 20% of the total ship fuel market in the mid to long term, making it an essential business for strengthening shipping and port competitiveness.

Ulsan is especially recognized as an optimal location for promoting the LNG bunkering business. It is a key point for domestic automobile exports and has abundant bunkering demand due to the high volume of petrochemical products and various raw materials being imported and exported. Additionally, it is adjacent to Busan Port, the 7th largest container throughput port globally and a logistics hub for Southeast Asia, making it advantageous for supplying LNG fuel to incoming container ships. It also covers the transportation demand for large bulk cargo to Pohang and Gwangyang, which is another strength.

Through this MOU, the three parties will jointly work on establishing a cooperative system covering the entire cycle from LNG supply for ships to the operation of dedicated bunkering vessels at an early stage. They plan to start negotiating key terms with the goal of establishing a joint venture (JV) in the first half of next year. After the JV is established, they intend to build new LNG bunkering vessels and actively enter the LNG bunkering business.

First, SK Gas plans to take a leading role in building a competitive LNG bunkering infrastructure by developing optimal operation solutions using LNG bunkering-dedicated terminals and securing LNG for ships, based on its experience operating LNG terminals. In particular, SK Gas is constructing Korea’s first and largest 10,000-ton class bunkering-dedicated terminal at Ulsan North Port’s Korea Energy Terminal (KET), which is expected to rival overseas LNG bunkering terminals in scale and performance.

H-line Shipping will be responsible for verifying the suitability of fuel supply using the STS (Ship To Ship) method based on its experience managing LNG-fueled fleets, contributing to the development of stable LNG bunkering demand. It will also focus its excellent new ship supervision capabilities on developing hull designs optimized for the domestic bunkering environment and constructing new vessels that meet the highest safety standards, thereby preparing competitive LNG bunkering-dedicated vessel operation plans.

Ulsan Port Authority, as the country’s top liquid logistics-focused port, plans to support the provision of stable LNG bunkering services based on its liquid cargo handling capabilities. Centered on Ulsan Port, it will comprehensively promote supply chain establishment, regulation development, and policy support to timely respond to LNG ship fuel market demand and secure global competitive demand.

Baek Heum-jeong, Vice President of SK Gas, said, “We are pleased that SK Gas can participate in this first-ever LNG bunkering business collaboration between private and public sectors in Korea. SK Gas, which can supply eco-friendly fuel, H-line Shipping, which operates ships, and Ulsan Port Authority, which has port operation expertise, will synergize to solidify a strong position in the Northeast Asian marine fuel supply market. Through this MOU, SK Gas plans to successfully enter the bunkering market and take a step closer to its ultimate vision of becoming a 'Net Zero Solution provider.'”

Sun Young-hoon, General Manager of H-line Shipping, said, “By building an LNG fuel supply network in the Southeast region through this private-public collaboration, we expect to improve the operational efficiency of LNG-fueled ships and provide better transportation services to customers through differentiated fleet operations, while strengthening cooperative relationships. Furthermore, the joint cooperation model based on expertise in energy, ports, and shipping will secure stable LNG fuel supply and competitiveness, establishing a foundation for expanding LNG-fueled and eco-friendly ships.”

Jeong Soon-yo, Vice President of Ulsan Port Authority, stated, “Ulsan Port, by partnering with SK Gas, a leading domestic energy company, and H-line Shipping, a leading national shipping company, will be able to establish a virtuous cycle system for the growth of the next-generation ship fuel industry. We expect to turn the transition to eco-friendly ship fuels into a new opportunity for the domestic ship fuel supply industry, which has faced growth limitations due to the disadvantage of oil prices, and create new markets in the port industry.”

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