Hyundai Glovis CEO Kim Jung-hoon (left) and Trafigura‘s executive director co-head of oil trading Jose Maria Larocca pose for photographs after they signed a business partnership deal in an online signing event held at their respective company headquarters in South Korea and Switzerland on Thursday. (Hyundai Glovis)
Hyundai Glovis, the logistics arm of Hyundai Group, announced on Sunday it will enter the gas shipping market in 2024 after striking a multi-year deal with major commodity trading company Trafigura.
The shipping deal with the Switzerland-based company will see the Hyundai Glovis carry ammonia and liquefied natural gas for up to 10 years for global markets.
Two very large gas carriers (VLGC), which boast 86,000 square meters in capacity, will be built with 200 billion won ($173.2 million) in investment, the company said.
Unlike LPG carriers, the cargo holds of Hyundai Glovis VLGCs are made with special materials to allow for carrying ammonia –- a feature only around 10 percent of VLGCs around the world have, the company explained.
Trafigura is one of the world’s largest commodities trading houses by turnover. In 2020, it raked up some 173 trillion won in revenue and 3.4 trillion won in operating profit.
The move marks the company’s shift towards new sectors which has previously focused on car carrier ships.
With liquefied hydrogen carriers yet to be commercialized, ammonia has emerged as an effective way of carrying hydrogen for the company, from which hydrogen can be extracted after being transported.
Hyundai Glovis also reaffirmed its efforts to build a hydrogen value chain.
“We have proved our competitiveness in the gas shipping industry through a long-term deal with a global commodity trading company,” an official at Hyundai Glovis said.
“We will also see the process of building a hydrogen value chain gather speed. We plan to carry liquefied hydrogen and take lead in global hydrogen distribution.”
In a world first, Hyundai Glovis and Hyundai Heavy Industries Group’s basic design for a 20,000-cubic-meter commercial liquefied hydrogen carrier won approval in principle (AIP) from the Korean Register of Shipping and the Liberian Registry last October.
By Yim Hyun-su (email@example.com