‘Joint Agreement for the Successful Promotion of the International Energy Hub’ Signed
Aerial view of the oil hub in Namhang Project, Onsan-eup, Ulju-gun, and Bukhang Project, Hwangseong-dong area, Nam-gu.
[Asia Economy Yeongnam Reporting Headquarters Reporter Dongguk Lee] Ulsan is joining forces with the public sector, government, and businesses to leap forward as an international energy hub.
On the 19th at 10:30 AM, Ulsan City will hold the “Global Energy Hub Construction Joint Cooperation Agreement Ceremony” at the Citizens' Hall on the first floor of the City Hall.
The event will be attended by about 30 people, including the Mayor of Ulsan, the Deputy Mayor for Economic Affairs, and related agency officials. The main agenda includes a progress report on the Oil Hub Promotion Council and the signing of a joint cooperation agreement.
Details include presentations on the progress of projects centered on the Northeast Asia Oil and Gas Hub Promotion Council, such as ▲Ulsan Oil and Gas Hub Project (Korea National Oil Corporation) ▲Ulsan New Port Development Plan (Ulsan Port Authority) ▲Petroleum-backed financial support (Ulsan City).
Following this, two business agreements will be signed at the ceremony: ▲Successful promotion of the international (global) energy hub ▲Petroleum-backed financial support to activate trading.
The “Joint Agreement for Successful Promotion of the International Energy Hub” includes participation from Ulsan City, Ulsan Customs, Ulsan Regional Maritime Affairs and Fisheries Office, Korea National Oil Corporation, Ulsan Port Authority, Korea Energy Terminal, and SK Gas.
These organizations will cooperate on business development, infrastructure establishment, and workforce training for energy diversification including petroleum, LNG, hydrogen, and renewable energy, in line with global energy policies such as carbon neutrality and energy security enhancement.
The “Agreement on Petroleum-backed Financial Support for Trading Activation” was signed between Ulsan City and BNK Gyeongnam Bank.
Currently, small and medium petroleum traders face loan restrictions from domestic financial institutions due to low credit ratings and petroleum price volatility. This structural problem leads to additional brokerage fees when using foreign banks or large domestic corporations.
In response, Ulsan City and Gyeongnam Bank will operate a petroleum-backed financial service (BNK Gyeongnam Bank Northeast Asia Energy Hub Loan) targeting small and medium petroleum traders using petroleum storage operators (tank terminals) in the Ulsan area, in preparation for the commercial operation of the North Port project in 2024.
The newly introduced financial service will operate by signing a tripartite agreement among petroleum traders, petroleum storage operators (tank terminals), and Gyeongnam Bank to support the issuance of letters of credit for small and medium petroleum traders.
The tripartite contract refers to petroleum traders (letter of credit issuance), the bank (securing collateral and disposal rights within the tank), and petroleum storage operators (responsible for product storage).
The service will be piloted from September and, once stability is verified, will be expanded nationwide.
Ulsan City has been promoting the Northeast Asia Oil and Gas Hub project aiming to become one of the world’s four major oil hubs.
Going forward, the plan is to build an international (global) energy hub by adding low-carbon and eco-friendly energies such as hydrogen to existing petroleum and LNG, establishing Ulsan as a core base for future new energy.
Through this agreement, the government and companies will cooperate to foster new energy industries such as hydrogen in ports and hinterlands centered on the Northeast Asia Oil and Gas Hub project, and proactively respond to the rapidly changing global energy market through the co-growth of related projects.
By activating new energy industries such as the Ulsan GPS power plant (LNG+LPG), LNG bunkering, hydrogen complex (LNG-extracted hydrogen, hydrogen production using LNG cold energy), and hydrogen port facilities (hydrogen terminal, hydrogen storage facilities, hydrogen ship bunkering), the plan is to attract private investment and create local jobs, thereby promoting economic growth.
Additionally, by cooperating with the financial sector to provide petroleum trading financial support, Ulsan aims to take a step forward not only in its three main industries but also in new energy and financial industries.
Mayor Kim Doo-gyeom said, “Ulsan City and the agreement institutions will work with one heart to ensure Ulsan can leap forward as an international (global) energy hub that balances carbon neutrality, energy supply, and economic growth.”
The Northeast Asia Oil and Gas Hub Ulsan project (North Port Phase 1 → North Port Phase 2 → South Port) began construction of the North Port Phase 1 project in July 2020, building LNG and petroleum storage facilities (14 tanks, 4.4 million barrels), with commercial operation starting in June 2024.
The North Port Phase 2 and South Port projects will be pursued after reviewing energy diversification.
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