Korean Shipbuilders’ Strength
French oil major Total recently signed letters of intent with Hyundai Heavy Industries and Samsung Heavy Industries with regard to eight 170,000-cubic-meter LNG carriers for the Anadarko LNG project in Mozambique. Orders are expected to be placed once Total completes shipowner selection in March. The total shipbuilding cost of the project is estimated at 3.4 trillion won.
In addition, Samsung Heavy Industries is expected to build icebreaking LNG carriers for the second phase of the Yamal LNG development project in Russia. The Russian government recently accepted the request of Novatech, a state-run energy company, so that it can place orders for the 10 icebreaking LNG carriers with a combined value of US$3 billion.
Samsung Heavy Industries has participated in the project in Russia since its design stage. Experts are predicting that Samsung Heavy Industries will win all of the orders in that Daewoo Shipbuilding & Marine Engineering won all the 15 icebreaking LNG carrier orders in the first phase in 2014
According to Clarkson Research, Chinese shipbuilders obtained 22 new orders last month while South Korean shipbuilders obtained only one. The difference is because the demand for non-large vessels, built mainly by Chinese shipbuilders, was large unlike that for large vessels, which are main products of South Korean shipbuilders.
In the meantime, industry insiders point out that problems related to offshore plants, drillships, and the like need to be addressed for the shipbuilding industry of South Korea to show any recovery. In Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, canceled drillship contracts led to significant business losses last year. Hyundai Heavy Industries is currently building merchant vessels to meet the shortage of offshore plant contracts.