Maritime industry fears foreign purchase of Hyundai LNG

Industry

Published: 09 May. 2023, 18:17 Updated: 09 May. 2023, 18:35

Maritime industry fears foreign purchase of Hyundai LNG

Hyundai LNG Shipping's gas carrier, HLS Diamond [HYUNDAI LNG SHIPPING]

The potential sale of Hyundai LNG Shipping to a foreign company has sparked concerns in Korea's maritime industry due to the potential impact on the nation's energy security.

Hyundai LNG Shipping was previously part of the LNG shipping unit of cash-strapped HMM but was fully acquired by a consortium of IMM Private Equity and its affiliate IMM Investment in 2014. The company is now being considered for sale to potential buyers from the United States, Britain and Denmark. Currently, the company operates 16 liquefied natural gas (LNG) carriers as well as six liquefied petroleum gas carriers, making it the largest LNG tanker operator in Korea.

On Monday, the Federation of Korea Maritime Industries (FKMI), which represents 54 organizations related to shipping, ports and logistics, issued a statement calling for the prevention of the overseas sale of Hyundai LNG Shipping.

The FKMI expressed concern over the potential impact on national economic and the security interest if the sale were to proceed.

They emphasized that Korea's dependence on shipping for strategic materials such as crude oil, gas and iron ore is 100 percent, and Hyundai LNG Shipping is primarily responsible for transporting LNG imported by the Korea Gas Corporation. If the company is sold overseas, Korea would have to rely on foreign companies for transportation of these critical materials, which could seriously impact the country's energy security, the federation said.

“The sale would result in the loss of decades of accumulated know-how related to strategic material transportation and long-term transportation rights contracts with Korea Gas Corporation,” the FKMI added.

They cautioned that the sale of Hyundai LNG Shipping could set a negative precedent and impact other companies, such as SK Shipping, which are also currently being considered for sale.

The Federation of Korean Seafarers' Unions (FKSU) also voiced fears, saying that "the potential ripple effects on our national economy and citizens' lives would be enormous if Hyundai LNG Shipping were to fall into foreign hands” through a statement issued Monday.

FKSU also drew attention to the lessons learned from previous gas price increases and called for the government to block the overseas sale of Hyundai LNG Shipping in order to ensure national economic stability.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]