Participation in the Global Energy Supply Chain
Opportunities for Securing Orders for Steel Pipe Products
Lee Hwiryung of SeAH Steel Shows Proactive Interest
Dongkuk Steel Responds Positively
POSCO and Hyundai Steel Remain Cautious
Mid-sized steel companies such as SeAH Steel and Dongkuk Steel are exploring the possibility of participating in the Alaska liquefied natural gas (LNG) project in the United States. While some assessments suggest that the project may lack business viability due to the need to transport LNG over a 1,300-kilometer land route, these companies believe that the ongoing restructuring of the global energy supply chain could actually present new opportunities.
According to industry sources on April 22, SeAH Steel is currently the most proactive among Korean steelmakers regarding the Alaska LNG project. Lee Hwiryung, CEO and Vice Chairman of SeAH Steel, described the project as a “good opportunity” and stated that the company would participate if the project materializes, during Alaska Governor Mike Dunleavy’s visit to Korea last month. Lee is the first executive at the head-of-industry level in the Korean steel sector to publicly express interest in participating in the Alaska LNG project.
This project involves transporting natural gas extracted from gas fields in northern Alaska via pipeline to Nikiski in the south, a distance of 1,300 kilometers, and then exporting it to Asian countries such as Korea, Japan, and Taiwan. The total project cost amounts to $44 billion (approximately 62 trillion won). Full-scale exports are expected to begin in 2031. Once pipelines are installed in Alaska, the LNG shipping time to Korea is projected to be about one week. Given that it currently takes three weeks to transport LNG from major reserves in Texas to Korea, this would reduce the shipping time to one-third of the current duration.
SeAH Steel’s strong interest in the project is due to its expertise in manufacturing high-strength, corrosion-resistant steel pipes. The Alaska LNG project will require a large volume of high-performance steel products, including steel pipes for gas pipelines, heavy plates for storage tanks, and steel materials for LNG carriers. SeAH Steel believes it has a competitive edge in the core area of steel pipes.
SeAH Steel has reportedly strengthened its local pipe dealer network and supply chain in the U.S. in response to increased investment in energy infrastructure. The company also has experience participating in several global projects, including the Willow Project and Coyote Project in the U.S., as well as Sabine Pass LNG and Corpus Christi LNG. SeAH Steel has also supplied steel pipes for global projects such as LNG Canada, Mozambique LNG, and the world’s largest single-scale project, Qatar LNG.
The Alaska LNG project aligns with SeAH Steel’s strategy of expanding participation in the global energy infrastructure supply chain. In 2022, SeAH Steel invested approximately $100 million in its U.S. subsidiary, SeAH Steel USA, to enhance its tubing and line pipe production capacity, and has continuously expanded its dealer network in North America.
Industry observers believe that participation in the Alaska LNG project could serve as a catalyst for expanding involvement in the global supply chain. An industry official commented, “A wide range of steel products, including pipes, heavy plates, and high-grade steel for storage tanks, can be used both directly and indirectly in this type of project. A strategic approach is needed as both a supplier and a consumer.”
Dongkuk Steel is also reportedly showing a positive stance toward the Alaska LNG project. While Dongkuk Steel is well known for its focus on color-coated steel sheets, it also produces pipes for energy and plant applications through its steel pipe division. As the company is currently working to secure new demand in the North American market, it is considered to have ample room to participate depending on the specific business conditions of the project.
In contrast, Korea’s two largest steelmakers, POSCO and Hyundai Steel, are taking a more cautious approach to the Alaska LNG project. Kim Kwonjong, Head of the Energy Policy Group at POSCO International, stated at the recent “Energy Innovation Forum” hosted by the American Chamber of Commerce in Korea (AMCHAM), “It is still too early to say whether we will participate in the project. We will need to check details through the government before there is any further discussion.” A Hyundai Steel official also commented, “There have been no specific discussions yet,” declining to elaborate further.
These companies are highlighting the risks associated with the Alaska LNG project. The biggest concern is the inability to guarantee economic viability. They are also taking into account the fact that global energy giants such as ExxonMobil and BP previously participated in the project but later withdrew. The absence of a designated project operator is cited as another reason why a detailed review is difficult at this stage. An industry official noted, “For large-scale international projects, contract terms are only determined once the operator is confirmed. At this point, it is best to keep a close watch on market developments.”
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