State-run energy companies have launched a project to support faltering local shipping and shipbuilding companies by placing orders for coal import deliveries and shipbuilding.

On Thursday, five power generation subsidiaries of the Korea Electric Power Corp., including Korea Midland Power and Korean Southern Power, signed an 18-year contact with four local shipping companies for the delivery of their coal imports, the energy source to fuel thermal power plants nationwide.

The shipping companies are Hyundai Merchant Marine, STX Pan Ocean, Hanjin Shipbuilding and SK Shipbuilding. 

“The four shipping companies will soon place nine bulk carrier-building orders with local shipbuilders, designed to deliver coal imports,” an official from the Ministry of Knowledge Economy said.

Industry watchers said the shipping companies are expected to gain 2 trillion won ($1.84 billion) in sales from the long-term delivery of coal imports.

The ministry said state-run Korea Gas Corp. also would join the project by placing seven LNG carrier-manufacturing orders worth 1.4 trillion won ($1.3 billion) with local shipbuilders at the end of 2014.

The ministry has developed a project to create a win-win partnership between state-run energy companies and the local shipping and shipbuilding industries, which have been in a slump due to falling orders since the global economic downturn in 2008.

It will continue to encourage the state-run energy companies to create a demand for local shipping and shipbuilding companies in their business in an attempt to boost the two industries.

By Seo Jee-yeon (jyseo@heraldcorp.com)