■ Eight shipbuilding and shipping companies, including SKTI, sign an MOU for “Establishment of a Win-win Fund for Installation of Eco-friendly Facilities”
■ “A proactive response based on mutual growth and generation of social and economic values” prior to IMO 2020 implementation
■ SKTI‘s LSFO blending industry and SKE VRDS will allow response to environmental regulations and strengthen the company‘s status in LSFO industry

SK Trading International has sought to provide a proactive response prior to the implementation of the IMO 2020 through cooperation and mutual growth with marine equipment and shipping companies.

To this end, SK Trading International (CEO & President Suh Sok Won) has announced on the 21st that he had signed a memorandum of understanding (MOU) for the “Establishment of a win-win fund for installation of eco-friendly facilities (scrubber*)” with Korea Ocean Business Corporation, Hyundai Merchant Marine, Hyundai Corporation, Hyundai Global Service, DSEC, and PANASIA.

*Scrubber: Equipment designed to reduce sulfur emissions from fuel oil by using seawater to cleanse the sulfur compounds from the emission.

The ceremony was held in the Korea Shipowners‘ Association building in Yeongdeungpo-gu, Seoul, with about 50 personnel from 8 companies including CEO Suh Sok Won of SK Trading International, CEO Hwang Ho-seon of Korea Ocean Business Corporation, CEO Yoo Chang-keun of Hyundai Merchant Marine, CEO Ha Myeong-ho of Hyundai Corporation, CEO Ahn Kwang-heon of Hyundai Global Service, CEO Shin Jun-seop of DSEC, CEO Yoon Yeong-jun of PANASIA, and CEO Nam Gi-cheon of Multi Asset Global Investments.

CEO Suh Sok Won commented, “We have sought to build a relationship of mutual benefit and growth with major shipping and shipbuilding equipment companies through this MOU.” He continued, “By pooling our efforts together in response to the regulations outlined in the IMO 2020, we will strive to create economic and social value at the same time.” Under this MOU, SK Trading International will seek to build a common profit across the industry and the social value of transitioning to eco-friendly energy sources.

SK Trading International and the other investment companies in the MOU (Hyundai Corporation, Hyundai Global Service, DSEC, and PANASIA) will establish a KRW 45 billion win-win fund to support the installation of scrubbers for vessels operated by the Hyundai Merchant Marine. SK Trading International will invest KRW 15 billion, approximately one-third of the total.

This win-win fund will be used to install the scrubber devices in 19 container ships, which are currently being operated by Hyundai Merchant Marine, by the first half of 2020. The amount of total funds required for the installation of the scrubbers is expected to reach about KRW 150 billion. KRW 45 billion will be paid by Hyundai Merchant Marine, KRW 60 billion will be sourced from the Korea Ocean Business Corporation in the form of a secured loan, while the rest will be funded by the win-win fund. Multi Asset Global Investments will handle the operation of the fund.

SK Trading International will use this MOU to create a win-win relationship between the participating companies and to provide a proactive joint response to the regulations of IMO 2020* with Korean shipping and shipbuilding equipment companies by supporting the scrubber installation cost. The MOU will also create opportunities for mutual benefits with shipbuilding equipment companies in Korea.

*Starting January 1, 2020, this new regulation from the International Maritime Organisation (IMO) will lower the cap for sulfur emission from 3.5% to 0.5%, prompting the industry to come up with a variety of solutions. The shipping industry has so far considered the installation of sulfur reduction facilities (sulfur scrubbers) or the use of low-sulfur fuel oil (LSFO), liquified natural gas (LNG), or other low-sulfur fuels.

SK Trading International has also leased an oil tanker in Singapore since 2010 to be used as a blending tank for its low-sulfur fuel oil (LSFO) production operations as a part of its effort to respond to changes in environmental regulations.

SK Energy, another affiliate of SK Innovation, has made KRW 1 trillion investment in November 2017 to establish a new vacuum residue desulfurization (VRDS) facility, which is planned for operation in late 2020. VRDS allows high-sulfur fuel oils like vacuum residue to be refined into high-value products like LSFO or diesel. The operation of this facility will allow SK Energy to become the largest supplier of LSFO in Korea.

▲ The signing of MOU for the “Establishment of a win-win fund for eco-friendly facilities” on the 21st, in the Korea Shipowners‘ Association building in Yeongdeungpo-gu, Seoul
(From the left) CEO Yoon Yeong-jun of PANASIA, CEO Shin Jun-seop of DSEC, CEO Ha Myeong-ho of Hyundai Corporation, CEO Hwang Ho-seon of Korea Ocean Business Corporation, CEO Yoo Chang-keun of Hyundai Merchant Marine, CEO Suh Sok Won of SK Trading International, CEO Ahn Kwang-heon of Hyundai Global Service, and CEO Nam Gi-cheon of Multi Asset Global Investments shake hands after the signing of the MOU.

▲ The signing of MOU for the “Establishment of a win-win fund for installation of eco-friendly facilities” on the 21st, in the Korea Shipowners‘ Association building in Yeongdeungpo-gu, Seoul (From the left) CEO Yoon Yeong-jun of PANASIA, CEO Shin Jun-seop of DSEC, CEO Ha Myeong-ho of Hyundai Corporation, CEO Hwang Ho-seon of Korea Ocean Business Corporation, CEO Yoo Chang-keun of Hyundai Merchant Marine, CEO Suh Sok Won of SK Trading International, CEO Ahn Kwang-heon of Hyundai Global Service, and CEO Nam Gi-cheon of Multi Asset Global Investments sign the MOU.