[THE INVESTOR] The US Forces in Korea has terminated its exclusive contract with Hanjin Group for the supply of gasoline and diesel, throwing open the doors for other competitors, according to local media reports Aug. 1.
Under the previous contract that expires at the end of this month, its affiliate Hanjin Transportation was the sole provider of oil for land use estimated to be worth an average of 70 billion won (US$62.81 million) a year.
Hanjin Group sold off its entire stake in S-Oil, owned through another affiliate Hanjin Energy, to Saudi Aramco’s overseas unit in 2014 to help finance its struggling arm Hanjin Shipping, which has dented its capacity to supply petroleum products.
When the two parties renewed the contract recently, Hanjin did not submit a regulatory filing that is required for contracts amounting to over 2.5 percent of an enterprise’s annual revenue.
As its turnover last year came in at 1.64 trillion won, the five-year contract is estimated to be under 41 billion won, making the value of annual supply below 8 billion won a year.
The remaining supply would be provided by its competitors including SK Energy, GS Caltex, Hyundai Glovis and CJ Korea Express, according to the industry and media reports.
