Hyundai Glovis, a logistics company of the South Korean Hyundai Group, is the newest shipping company to announce plans to expand into the emerging market for transporting new forms of energy. Best known for its auto transporter business, which moves more than 275,000 vehicles each year, confirmed reports that it has partnered with trading company Trafigura to build an ammonia and liquefied petroleum gas (LPG) shipping business.
“With this contract as an opportunity, Hyundai Glovis will get seriously into the gas transportation business,” said the company in its official announcement of the partnership. Hyundai Glovis said it “planet to focus its capabilities on building a hydrogen value chain by transporting ammonia and LPG to meet global demand.”
For this project, Hyundai Glovis plans to invest more than $ 170 million in the construction of two VLGCs. The order for the ships is reportedly going to another group within Hyundai, the Hyundai Samho, whose ship is due for delivery in 2024. With a loading capacity of 86,000 m3, the new ships will be among the largest global gas carriers.
Unlike traditional gas tankers that typically carry LPG, Hyundai Glovis said the new VLGCs will be specifically designed to carry ammonia, which requires specially designed cargo tanks. According to the company, there are currently only about 20 VLGCs that can charge ammonia, which is less than 10 percent of the total VLGC fleet.
They assume that the market will develop quickly and strive for a first mover advantage over the expected competition. Currently, ammonia, which is mainly used in the manufacture of fertilizers and petrochemicals, is transported in small and medium-sized gas tanks with a loading capacity of 35,000 m3 or less. As ammonia will increasingly become the basis of alternative power generation in the future, Hyundai Glovis assumes that the planned VLGCs will become an optimized ship for ammonia shipping.
Hyundai Glovis pays particular attention to the transport of ammonia by ship, which is considered to be the most efficient hydrogen storage and transport medium based on the current state of technology. They found that it is easier to liquefy compared to hydrogen and, due to the current use of ammonia, has the advantage that a basic infrastructure for transport and storage has already been established in many countries.
Trafigura, as one of the largest commodity traders in the world, has acted aggressively to explore future opportunities in hydrogen-related commodities and, like Hyundai Glovis, has sought to become a leader. Among other things, Trafigura reached an agreement with the German company Hy2gen in the summer to develop a study that quantifies the infrastructure and production requirements for green ammonia to decarbonise the shipping industry.