[SPONSORED REPORTS] Kogas gets serious about LNG bunkering business

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[SPONSORED REPORTS] Kogas gets serious about LNG bunkering business

Officials from Kogas and its five partner organizations signed the documents to create a new joint LNG bunkering venture on July 14. [KOGAS]

Officials from Kogas and its five partner organizations signed the documents to create a new joint LNG bunkering venture on July 14. [KOGAS]

“As a part of our eco-friendly business expansion plan, Korea Gas Corporation (Kogas) will push forward to promote liquefied natural gas (LNG) bunkering with 37 years of experience in the natural gas industry,” said Chae Hee-bong, Kogas president, in a commemorative speech to mark the 37th anniversary of the launch of the corporation in August.

LNG bunkering is the procedure of providing liquefied natural gas to a ship for its own use, rather than as cargo. In comparison to traditional fuel, LNG emits 100 percent less sulfur oxide and dust, 15 to 80 percent less nitrogen oxide, 20 percent less carbon dioxide and 99 percent less fine dust, making it the ideal green fuel.

International pacts and restrictions are what prompted Kogas to venture into the LNG bunkering industry. International Maritime Organization’s IMO 2020 regulation mandates a maximum sulfur content of 0.5 percent in marine fuels globally, down from the previous 3.5 percent. North America and European restrictions will force it to be lower than 0.1 percent.

Kogas, having already built the only four LNG specialized shipment facilities in Korea at its Tongyeong station, finished construction of the LNG carrier SM Jeju LNG 2. The SM Jeju LNG 2, which will shuttle between Tongyeong and Jeju station, is the first LNG bunkering vessel in Asia with ship-to-ship LNG bunkering facilities.

Last July, Kogas partnered with the Busan Port Authority, Posco international, S-Oil, Hyundai Glovis and Daewoo Logistics on LNG bunkering. The five organizations signed the Agreement on Establishing an LNG Bunkering Joint Venture, agreeing to establish a joint venture that could lead the industry in storing, distributing and supplying natural gas.

With assistance from the joint venture, Kogas aims to reach 1.36 million tons in LNG sales, 1 trillion won ($860 million) in total sales, while producing 8,315 fewer tons of sulfur oxides and 2,557 fewer tons of fine dust. To implement the plan, Kogas is also planning to acquire three bunkering ships and secure loading facilities at the Dangjin LNG production station.

“Kogas’ preliminary investment into LNG bunkering will pave the way for this country’s bunkering industry. With our multi-pronged expansion in the green energy transition business, Kogas will lead Korea’s low-carbon, environmentally friendly energy market,” Chae added.

By Ahn Tae-lahm [ahn.taelahm@joongang.co.kr]
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