Headquarters Manager Lim Yang-hyun of K-sure delivers his speech at the 11th Korea Ship Finance Forum held on Nov. 1 at Paradise Hotel in Busan.(Photo: K-sure)

Korea Trade Insurance Corp. (K-sure), led by President Moon Jae-do, is about to step up its support for LNG tanker exports.

K-sure’s LNG terminal project in Bahrain was picked by Project Finance International as the Year’s Best Project in 2016 and received the LNG Excellence Award in February.The trade insurance firm also participated in the 11th Marine Money Korea Ship Finance Forum held on Nov. 1 at Paradise Hotel in Busan, which dealt with the subject of the LNG tanker market and ways to strengthen the Korean shipping industry’s competitive power in the LNG sector. One way is to boost financial support for LNG tanker exports.

K-sure said at the forum that the global LNG tanker market has taken a turn for the better, with Korean shipyards getting more LNG tanker orders. 

Korean shipyards now have an opportunity to capture enough orders for LNG tankers enough to make it a new income source.

The South Korean government has announced a $1.2 billion ship investment fund to support the nation’s struggling shipping industry.

Yonhap News Agency reported that the fund will be used to help ship owners buy and sell vessels with less financial risk and to guarantee the acquisition of new vessels ordered in the country’s shipyards, as Korea Trade Insurance Corporation and Korea Maritime Guarantee Insurance will offer insurance services for the deals. The Korea Development Bank will also participate in the fund.

South Korea’s economy is highly dependent on exports, and it has been hit by a drop in global trade. Companies such as Hyundai Merchant Marine and Hanjin Shipping were hit when the nation suffered an 11-month drop in exports last year.

The private-public partnership is being developed to supplement local gas production in Bahrain and ensure capacity to meet peak seasonal gas demand and industrial growth. Financing a project of this size and complexity is a landmark in the regional financial markets.

According to the company, nine banks were lending the $741mn it will cost to build the plant and related infrastructure, capable of handling 800 million standard cubic feet per day when complete in 2019. The project includes a nitrogen facility, to lower the calorific value of imports as needed.

Bahrain LNG is jointly owned by Bahrain's oil and gas holding (NOGA) and a consortium consisting of Teekay LNG Partners, Gulf Investment Corporation and Samsung C&T.

Standard Chartered, Arab Petroleum Investments Corp (APICORP), and Korea Development Bank were the institutions leading the limited recourse project financing, which was provided by nine international and regional lenders.

About 80 percent of the financing was backed by commercial and political risk cover provided by export credit agency Korea Trade Insurance Corporation.

The Korea Trade Insurance Corporation announced on Jan. 19 that it succeeded in collecting 97 million euros with regard to the Mapna project in Iran.

In the power plant construction project, Doosan Heavy Industries signed two waste heat recovery boiler export contracts worth 230 million euros in total for the construction of a combined cycle power plant in the vicinity of the Iran Power Development Company. The Korea Trade Insurance Corporation provided long-term export insurance in 2004 and 2007 to that end. Then, the Korea Trade Insurance Corporation had to pay insurance benefits due to the outstanding principal and interest that resulted from U.S. economic sanctions on Iran.

“The collection of the money is meaningful in that it constitutes a part of the tangible accomplishment of economic cooperation between South Korea and Iran after the lifting of the economic sanctions,” said the South Korean corporation, adding, “We achieved a win-win relationship with Iran by providing new financial assistance while collecting the money.”

“As the only South Korean public company that is running its own organization for the collection of export receivables, we are going to make continuous efforts so that South Korean companies can be protected from financial difficulties,” Korea Trade Insurance Corporation president Kim Young-hak remarked. 

“At the same time, we will do our utmost and make the most of the cooperative relations between the two countries so that South Korean companies can expand their business in Iran.”