KOGAS eyes LNG bunkering for future growth

A Korea Gas Corp. (KOGAS) employee checks bunkering facility in this file photo. / Courtesy of KOGAS

By Nam Hyun-woo

A tank truck supplies liquefied natural gas (LNG) into Green Iris LNG-propelled ship at a Korea Gas Corp. (KOGAS) terminal. / Courtesy of KOGAS

Korea Gas Crop. (KOGAS) plans to cooperate with global fuel bunkering firms to improve its liquefied natural gas (LNG) bunkering capacity.

Also, the state-run gas corporation said it will request the government amend laws and rules for LNG's use as ship fuel through the end of next year, in order to take the lead in the forthcoming era of LNG-propelled ships being the mainstream.

According to KOGAS on Thursday, it plans to build ties with global bunkering firms including Shell and Mitsui to improve its LNG bunkering capacity.

Bunkering refers to the supply of fuel for ships and LNG bunkering is emerging as one of the new growth industries amid toughened maritime environmental rules. By using LNG as a fuel, ships can cut their sulfur oxides, nitrogen oxide, dust and carbon dioxide significantly than using existing fuels, meeting enhanced global environmental rules.

KOGAS said it is paying more attention to LNG because emissions from ships also contribute significantly to air pollution.

According to KOGAS data, one container vessel's sulfur oxides emissions are tantamount to that of 50 million diesel passenger cars. Due to such a heavy footprint, 73 percent of all sulfur dioxides emissions in Busan, Korea's largest port city, is from ships, well above that of other cities. This is largely because ships burn high-sulfur compliant fuels, such as bunker-C, which are cheap but contain a large amount of contaminating substances.

In light of this, the global shipping society is shifting its focus to LNG as a fuel for ships. The International Maritime Organization in 2016 decided to lower the global cap for the sulfur content of fuel oil from the current 3.5 percent to 0.5 percent by Jan. 1, 2020, which will require ships to either use expensive but less polluting fuels or adopt to LNG turbines.

Following these moves, the global demand for LNG bunkering is expected to grow to 20 million to 30 million tons per year by 2030. Lloyd's Register, a maritime ship registry, anticipates that up to 1,962 LNG-propelled ships will be built by 2025, accounting for 12.6 percent of the total.

Currently, Korea has only two LNG-propelled ships, while POSCO and Korea South-East Power Company have plans to introduce LNG-powered ships.

KOGAS is currently bunkering LNG at its Pyeongtaek and Tongyeong terminals by using tank trucks. At the end of next year, KOGAS will complete an LNG bunkering ship. Also, it is participating in the Society for Gas as a Marine Fuel, an NGO setting LNG bunkering international standards.

“Amid enhanced regulations of fossil fuels, the world is looking at fierce competition to explore sustainable energy sources and relevant technologies,” a KOGAS official said. “Through LNG bunkering, KOGAS will preemptively respond to the rapidly changing environmental issues.”