POSCO partners with ExxonMobil to target LNG storage tank materials market

POSCO, South Korea’s largest steel producer, will collaborate with US-based oil giant Exxon Mobil Corp. to develop liquefied natural gas (LNG) tank materials, according to the company on Oct. 7.

On Wednesday, the domestic steel heavyweight signed a memorandum of understanding with ExxonMobil Research & Engineering and ExxonMobil Upstream Research Company to speed up the development and applications of high-manganese steel for global LNG projects and the energy industry.

Through the partnership, POSCO’s cryogenic high-manganese steel will be used in the storage tanks of global LNG projects commissioned by ExxonMobil.

POSCO has claimed the title as the world's first to develop cryogenic high-manganese steel, a steel material containing 10 to 27% manganese. The company developed the material intending it for use in the storage and transport of LNG. The steel product is fancied as a material for LNG storage tanks owing to the cryogenic feature that allows it to withstand temperature as low as minus 196 Celsius.

Last year, the company's high-manganese steel received approval to be used for land LNG tanks from the Ministry of Trade, Industry and Energy. It was first used in POSCO’s Gwangyang-based LNG Terminal tank No.5.

During the MOU ceremony, ExxonMobil said that it looks forward to a long-term, strategic partnership. POSCO proposed expanding the scope of the partnership to develop eco-friendly technology such as reducing carbon emissions.

This is not the first time the two industry giants have convened in a technical partnership. Between 2012 and 2017, POSCO and ExxonMobil agreed to mass produce high-manganese steel and apply it to slurry pipes, marking the first time for manganese steel to be used in this capacity.

The Korean steelmaker expects cryogenic high-manganese steel products to generate sales worth 100 billion won over the next three years. According to the company, high-manganese steel is less expensive and tougher than existing materials used for LNG tanks, making it competitive enough to replace existing products.

In the second quarter, POSCO posted 13.7 trillion won in revenue and 167.7 billion won in operating profit.

Write to Man-su Choe at bebop@hankyung.com