Posco targets LNG cargo tank market with Hanwha Ocean

Posco said Thursday it signed a memorandum of understanding with Hanwha Ocean to develop and test liquefied natural gas carrier cargo tanks made from its proprietary high-manganese steel, aiming to expand the material’s commercial use in shipbuilding.

The agreement was signed at Hanwha Ocean’s shipyard in Geoje, South Gyeongsang Province, with Posco CEO Lee Hee-geun and Hanwha Ocean CEO Kim Hee-cheul in attendance.

Under the deal, Hanwha Ocean will build a demonstration vessel equipped with steel cargo tanks to assess their safety, durability and operating efficiency under actual sailing conditions. Posco International and Posco Flow will help secure and operate the vessel.

Posco’s high-manganese steel retains its strength and impact resistance at temperatures below minus 163 degrees Celsius, making it suitable for transporting LNG. The company says the material offers cost and supply advantages over Invar, a nickel alloy commonly used in LNG cargo tanks, because manganese is more widely available.

Expanding into cargo tanks could significantly increase demand for the material. An LNG carrier requires more than 10,000 metric tons of cargo tank material, compared with roughly 1,000 tons for a vessel’s LNG fuel tanks, according to Posco.

The company said its tank design can accommodate varying rates of LNG evaporation, known as boil-off, while resisting sloshing — the movement of liquid cargo against tank walls. Its independent tank structure could also shorten ship construction time.

The partnership builds on more than a decade of joint research. As of 2026, Posco’s high-manganese steel had been used in 51 vessels, including ships fitted with LNG fuel tanks.

The companies also plan to expand the material’s use to LNG bunkering vessels and floating storage and regasification units, with longer-term ambitions in hydrogen, ethane and ammonia transport.

“Posco’s high-manganese steel technology will be a key asset in strengthening the Korean shipbuilding industry’s global competitiveness,” Lee said. “Starting with LNG cargo tanks, we aim to lead global standards in environmentally friendly shipbuilding materials.”