Korea Shipbuilding & Offshore Engineering Secures 4 LNG Carriers... Virtually Achieves Annual Target

Daewoo Shipbuilding & Marine Engineering Secures 725.3 Billion KRW Marine Equipment Order

Fixed offshore oil production facility built by Daewoo Shipbuilding & Marine Engineering. Photo by Daewoo Shipbuilding & Marine Engineering

[Asia Economy Reporter Choi Dae-yeol] Korea Shipbuilding & Offshore Engineering announced on the 14th that it has signed a contract with a foreign shipping company to build four liquefied natural gas (LNG) carriers for 911.2 billion won.

With this contract, the cumulative orders this year have nearly reached 14.8 billion dollars, effectively achieving the annual target (14.9 billion dollars) in just over half a year. The vessels ordered this time are ultra-large LNG carriers, with two ships each being built at Hyundai Heavy Industries in Ulsan and Hyundai Samho Heavy Industries in Yeongam, Jeollanam-do. They are scheduled to be delivered to the shipowner in the second half of 2025.

Korea Shipbuilding & Offshore Engineering has secured a total of 163 vessels (including 2 offshore units) worth 14.8 billion dollars to date. It is also reported that there are additional negotiations with overseas shipping companies, so the industry expects that exceeding the target is possible. A company official said, "Since we have secured a certain level of workload, we will be able to improve profitability through selective orders going forward."

Daewoo Shipbuilding & Marine Engineering announced on the same day that it signed a contract with Qatar NOC to build a fixed oil production facility for 725.3 billion won. The facility ordered this time is intended to increase oil production in the Al Shaheen field, Qatar's largest oilfield area, and is scheduled to be constructed and delivered by the second half of 2023. The facility consists of upper and lower structures and connecting bridges to other equipment.

The company secured an FPSO worth 1.1 trillion won last month and has now won another offshore facility order within a month. This is the first time in eight years since 2013 that the company has secured multiple offshore facility orders in the same year. Daewoo Shipbuilding has secured a total of 40 vessels worth 6.13 billion dollars this year, including 16 container ships, achieving 80% of its target of 7.7 billion dollars.

Samsung Heavy Industries has secured a total of 6.5 billion dollars so far, including six LNG carriers, achieving 71% of its target (9.1 billion dollars). The company initially set its annual target at 7.8 billion dollars at the beginning of this year but raised it in May.

The industry expects that the container shortage will continue for several years, and due to environmental regulations requiring the reduction of existing vessels, order volumes are expected to remain steady mainly among major shipping companies for the time being. The fact that domestic large shipbuilders have secured technological capabilities to respond to environmental regulations, such as dual-fuel propulsion, is also an advantage in the order competition. However, it is anticipated that recovering profitability to past levels will be difficult due to rising raw material prices.

This content was produced with the assistance of AI translation services.