E.ON seeks partner among shipbuilders here
By Park Ji-won
Christopher Delbruck CEO of E.ON
E.ON, a major German energy company, is talking to four Korean shipbuilders to choose one to provide an LNG carrier, the company’s chief executive said Tuesday.
E.ON does not yet have any business ties with Korean companies.
“We need to be here to talk to potential counter parties, to see customers in the region, and to see how we can work together and build a relationship,” E.ON Global Commodities CEO Christopher Delbruck said in a recent interview on the sidelines of the four-day energy event that ends Thursday.
“We realized we need to be more visible to customers here. We talked to a lot of Korean and Japanese companies about how we can support them in meeting the energy demand in Asian societies,” the CEO said.
Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and STX Offshore & Shipbuilding told The Korea Times they were contacted by the German firm and are likely to participate in the bidding expected toward the end of the year.
The company is participating in the Gastech energy conference with other energy peers to create a stronger presence in Asia where demand for gas and LNG is rising.
“Doing business in Asia is a long-term business. Therefore E.ON wants to be here even if it does not have yet that much business. It sees there is a good potential to work here,” Delbruck said.
Currently, E.ON counts Europe, North America and Russia as its major markets. But it is now looking to Korea and other Asian markets. The company mainly delivers power and gas to customers in the regions. The company earns 70 percent of its earnings in Europe.
“We are a major player in helping society to get alternatives to fossil fuels,” he said.
E.ON didn’t elaborate on the project but STX Offshore confirmed the talks are underway for a partnership. The three other shipbuilders said they were giving serious consideration to joint projects. The bidding process for the LNG ship is expected to begin late this year, according to STX.
“Shipbuilding is interesting for us. As we have projects, we need LNG capacities or shipping capacities. Obviously, we would turn to Korea to look for opportunities,” said Delbruck. Korea’s shipbuilding capabilities are unrivaled particularly in LNG-carrying ships and other floating platforms for LNG storage and processing.
In addition to shipbuilders, Delbruck said E.ON is also in talks with Korea Gas Corp. (KOGAS), the world’s single-biggest LNG buyer, for a business partnership, though he didn’t elaborate.
KOGAS and other Asian gas buyers are moving to increase LNG imports due to lower costs and environmental benefits of the super-cooled gas.
“The Gas and LNG market is determined primarily by Asian demand. Northeast Asia is the region we are going to focus on. Northeast Asia is a major market for us given that their gas demand is so big,” Delbruck said.
He said Korea and Japan could be the starting point in diversifying E.ON’s business portfolio and could play a part in boosting its earnings.
E.ON posted a net profit of 2.5 billion euros ($3.5 billion) for the whole of 2013, down 3.8 percent from 2.6 billion euros a year earlier.
“The energy markets and the prices in the market have declined significantly so therefore profits have declined,” Delbruck explained.
As for challenges ahead, the energy industry should meet a growing demand for energy, to keep the energy affordable and environmentally friendly, he said.