Korea’s Fair Trade Commission (KFTC)’s fining 12.52 billion won ($11.32 million) on Gaztransport & Technigaz (GTT) S.A. for abusive commercial practices with local shipyards is expected to remove a major hurdle in LNG building, a key income for Korean dockyards.
The antitrust agency found the French company, the world’s largest LNG cargo containment system provider, had forced Korean LNG vessel builders to purchase its technical assistance services in addition to license transactions for LNG cargo containment technology and issued a remedial order.
GTT owns core technologies for designing the membrane-type LNG tanks predominantly used by the shipping industry, but it has excessive control over the LNG carrier manufacturing process, even though it had no experience of building vessels or installing LNG tanks, said Park Moo-hyun, a market researcher at Hana Financial Investment.
The ruling will help Korean shipyards build LNG carriers in a much faster time frame without GTT’s technology meddling. In addition, part of their license costs of up to 10 billion won per vessel could be saved to go more profitable.
Korean shipyards inevitably had to rely on its patented technology because of vessel owners’ preference of a membrane-type LNG tank.
LNG tanks must be designed to maintain cryogenic conditions of minus 162 degrees Celsius to avoid an explosion. That is why vessel owners are reluctant to shift to new containment technologies.
Korean shipbuilders have been working to develop their own technologies for LNG cargo containment systems that could replace GTT’s technology. Daewoo Shipbuilding & Marine Engineering’s Solidus LNG tank introduced in 2017 offers a daily LNG boil-off rate (BOR) of 0.049 percent, far lower than the GTT Mark III Flex Plus system`s 0.07 BOR. Samsung`s KCS is known to be on a par with GTT’s, according to Park.
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]