South Korean steelmakers POSCO and SeAH Steel Corp. will jointly supply 12,000 tons of stainless steel pipe for a liquefied natural gas project in Kitimat, Canada, according to the steel industry on Sept. 11. Separately, SeAH Steel has also secured orders for 60,000 tons of welded carbon steel pipes.
The combined $100 million order will be supplied early next year. POSCO will first manufacture semi-finished stainless steel plates that will then be completed and ready to ship off by SeAH Steel.
“The products they ordered range from 6.4mm to 40mm in thickness requiring fastidious production. Also, it will be important for us to keep a strict deadline as it is a large project. This order will help boost the credibility of the Korean steel industry,” said a source from SeAH Steel.
Kitimat is the largest LNG project in Canada valued at $14 billion. The first phase of the project will include setting up two LNG trains that can produce 13 million tons of LNG.
The second phase, set after 2024, will add on LNG trains more or less in the same capacity.
“Global demand for LNG is increasing, which will also push up demand for stainless steel pipe,” said a source from the steel industry. “This is a promising business opportunity for Korean steelmakers.”
In general carbon steel is used in crude oil pipelines, but LNG requires a stainless steel pipe that can handle extremely low temperatures as it is shipped at 100 degrees below zero.
Korea Gas Corporation holds a 15% stake in the Kitimat project and plans to procure 700,000 tons of LNG annually from the plant between 2024 and 25.
This is not the first time that the two domestic steel giants have worked together. Earlier in 2017, SeAH Steel and POSCO teamed up to supply 12,000 tons of pipe products for Exxon Mobil’s Kearl Oil Sands project in Canada.
By Man-Su Choe
<Edited by Danbee Lee>