HD Hyundai Chemical struck a seven-year agreement to import 200,000 tons of liquefied natural gas annually from TotalEnergies starting in 2027, marking the first time a South Korean petrochemical company has secured direct overseas gas supplies.
The deal, signed September 24 at the company’s Daesan headquarters, breaks from the traditional practice of Korean petrochemical firms purchasing LNG through state-controlled Korea Gas Corporation or domestic energy companies. HD Hyundai Chemical expects the arrangement to cut fuel costs by 21% compared to current off-gas usage at its naphtha cracking center.
The joint venture between HD Hyundai Oilbank and Lotte Chemical will still rely on KOGAS infrastructure, utilizing the state company’s regasification terminals in Incheon, Pyeongtaek, Tongyeong, and Samcheok for storage and processing. Pricing is indexed to both Brent crude and Henry Hub natural gas benchmarks.
TotalEnergies views the contract as part of its strategy to secure long-term Asian sales and reduce exposure to volatile spot market pricing. For HD Hyundai Chemical, the move represents a calculated bet on cost savings at a time when South Korean petrochemical companies face margin pressure from overcapacity and rising competition from Chinese producers.
KOGAS imports approximately 90% of Korea’s LNG and maintains a monopoly in domestic wholesale distribution, making this direct-import model a notable departure from established industry practice.
