South Korea-based dry bulk operator Korea Line has decided to spin off its LNG transportation business into a stand-alone company called Korea Line LNG
At present all of Korea Line’s LNG carriers are under charter with Kogas, South Korea’s state run natural gas company.
Korea Line LNG will focus on LNG transport and LNG bunkering with eight operational vessels and three newbuildings. The company’s remaining bulk carriers, tankers and single ferry will remain under the original entity.
The new company will be operational from 1 May 2020. Korea Line said the move is an attempt to make their carrier and bulk transport businesses more efficient.
According to South Korea’s Financial Supervisory Service, Korea Line’s revenue last year was US$1.3Bn down by 24.6% from the previous year. The company’s operating profit also fell by 9.9% to US$104.4M.
Korea Line said it expects splintering the business will allow the companies to respond to developments in their respective markets independently. In addition, Korea Line does not intend to relist the new LNG business on South Korea’s securities exchange, or seek new equity holders for it.
The firm is also building an 18,000-m3 LNG bunkering vessel at Hyundai Mipo Dockyard in South Korea, which will be equipped with a cargo handling system supplied by Wärtsilä. When delivered in 2002, the LNG bunkering vessel will be the largest in South Korea and go on long-term charter to Shell.
Korea Line is the second LNG shipowner to decide to spin off its carrier business from other segments. In 2019, Bermuda-based Golar LNG revealed its intention to separate its LNG carrier business from its power generation unit. However the move has been pushed to 2020.