POSCO has joined forces with Hanwha Ocean (042660.KS) to expand the use of high-manganese steel, a cryogenic special steel it developed independently, in the cargo containment systems that serve as core equipment on large liquefied natural gas carriers. The plan is to lift the competitiveness of Korean shipbuilding by launching a demonstration vessel built with domestically developed materials in an LNG cargo tank market that has long depended on foreign technology.
POSCO said it signed a memorandum of understanding on securing a high-manganese steel cargo tank demonstration vessel on the 15th at Hanwha Ocean's Geoje shipyard in Geoje, South Gyeongsang Province. POSCO President Lee Hee-keun and Hanwha Ocean CEO Kim Hee-cheol attended the signing ceremony along with other senior executives from both companies.
High-manganese steel is a special steel that maintains strong tensile strength and impact toughness even in environments below minus 163 degrees Celsius. Because it uses manganese, which is abundant in reserves, it offers better cost competitiveness and more stable material supply than the expensive nickel alloy steel previously used in most LNG cargo tanks.
The two companies plan to build a demonstration vessel equipped with a high-manganese steel cargo tank, with Hanwha Ocean taking the lead, and to verify safety, durability and operational efficiency under actual sailing conditions. That will give them an operating record to present to global shipowners. Major group affiliates including POSCO International (047050.KS) and POSCO Flow will also take part, providing full support for securing and operating the demonstration vessel.
The high-manganese steel cargo tank can flexibly deliver anything from an ultra-low boil-off rate that minimizes LNG losses to an economical boil-off rate, depending on customer requirements. Its structural rigidity also removes operating restrictions tied to sloshing, the phenomenon in which liquid cargo surges and strikes tank walls. In addition, its independent structure, in which the cargo tank is manufactured separately and then installed on the vessel, can sharply shorten shipyard construction time compared with conventional methods.
The partnership is significant because it widens the application of high-manganese steel beyond a vessel's own fuel storage tanks to large cargo storage systems. An LNG fuel tank requires about 1,000 tons of material per vessel, while an LNG carrier cargo tank takes more than 10,000 tons per vessel.
POSCO also expects the partnership to be a turning point that raises the cost and technology competitiveness of Korean shipbuilding by a notch, leading with high-manganese steel as a domestically developed material in an LNG cargo tank market that has relied on foreign technology.
Commercializing high-manganese steel is a business in which POSCO Group Chairman Chang In-hwa has invested since early on. As head of the technology investment division in 2017, Chang led the application of high-manganese steel to construction of the No. 5 unit at the Gwangyang LNG terminal. While serving as POSCO president in 2020, Chang visited Hanwha Ocean's management in person to explain the feasibility of applying the material to vessels, driving efforts to open sales channels. After the material was applied to Hanwha Ocean's very large crude carriers and container ship fuel tanks in 2021, high-manganese steel has been adopted on a cumulative 51 vessels to date.
Using the demonstration as a stepping stone, the two companies plan to broaden the application to offshore energy infrastructure such as LNG bunkering vessels and floating storage and regasification units, or FSRUs, while also expanding into carriers for next-generation energy sources including liquefied hydrogen, ethane and ammonia.
"Starting with LNG cargo tanks, we will lead global standards in the market for eco-friendly ship materials," POSCO President Lee Hee-keun said.
Hanwha Ocean CEO Kim Hee-cheol said, "We will expand the application to various low-temperature cargo transport fields, including LNG, and establish overwhelming technological strength in the global market."