On February 14th, 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.

STX Pan Ocean is expected to gain 500 billion won in sales from the long-term delivery of coal import for the next 18 years from the beginning of delivery operations in 2016 and 2018, under the contracts with Korea Midland Power and Korea East West Power, respectively.

“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.

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.

Source: STX Pan Ocean