Off-shore Plant Standard
Daewoo Shipbuilding & Marine Engineering’s Songa Project, which was completed in March this year, has resulted in a loss of no less than one trillion won. The design of the four offshore plants pertaining to the project was changed 110 times in total while the average construction cost jumped from 600 billion won to 850 billion won and the delivery of the plants was delayed by 10 months to a year. Daewoo Shipbuilding & Marine Engineering has filed for arbitration with the London Maritime Arbitrators Association, claiming that Songa Offshore, the ordering body, compensate for the loss.
The top three South Korean shipbuilders, that is, Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, are planning to work together to prevent such losses incurred by offshore plant projects. In this context, they launched an international project early last month with global energy companies and design companies and are going to come up with a standard offshore plant design & processing model by the second half of next year.
The joint industry project is joined by not only the three shipbuilders but also the American Bureau of Shipping, DNV GL, Chevron, Royal Dutch Shell and engineering companies such as Technip and Modec. In addition, Exxon Mobil, BHP Billiton Petroleum, Total and Statoil are likely to joint it.
The South Korean shipbuilders are expecting that this business model standardization will lead to a higher level of competitiveness as well as loss reduction. Furthermore, South Korean equipment manufacturers can increase their presence in the offshore plant market based on component standardization. At present, domestically-produced equipment and components account for only 20% or so of those used by South Korean offshore plant builders.