Successive Orders

Samsung Heavy Industries has won orders for four oil tankers on Oct. 12, following the deals for liquefied natural gas carriers secured late September.
Samsung Heavy Industries has won orders for four oil tankers on Oct. 12, following the deals for liquefied natural gas carriers secured late September.

 

Samsung Heavy Industries Co., the nation’s major shipbuilder, has won orders for four oil tankers this time following the deals for liquefied natural gas (LNG) carriers secured late September.

Samsung Heavy Industries announced on Oct. 12 that it has secured a 240 billion won (US$212.77 million) deal from Norway-based Viken Shipping AS to build two 113,000 deadweight ton (DWT) oil tankers and two 157,000 DWT oil tankers. The latest deal came two weeks after the shipyard clinched a deal to build two LNG carriers at the end of last month, marking the first contract in nine months.

The order on two of the smaller oil tankers and one 157,000 DWT tanker became binding on the same day, and the remaining fleet order will be placed within this year.

In particular, the latest shipbuilding order is attached with the option for the ship owner to change the order to an LNG-powered carrier, reflecting the environmental protection movements around the globe. If the Korean shipbuilder ends up constructing an LNG-powered crude oil carrier upon the Norwegian shipper’s request, it will become the first shipbuilder in the world to have built an LNG-powered oil tanker and the order value will also go up according to the cost of the change.

Samsung Heavy Industries expects that Viken Shipping is highly likely to change the order to LNG-powered carriers due to stricter international environmental regulations. The International Maritime Organization (IMO) designated the North Sea area, the Baltic Sea area, the North American area and the United States Caribbean Sea area as emissions control areas, or ECAs, and has limited vessels’ sulphur oxide (SOx) emissions to 0.1 percent from last year. The IMO is now seeking to impose stricter environmental regulations in the waters other than ECAs to lower the SOx emissions from the current 3.5 percent to 0.5 percent. LNG vessels emit 97 percent lower SOx emissions than existing bunker-C oil carriers.

Samsung Heavy Industries is expected to win additional deals. The shipbuilder concluded the contract on the 4th for a Coral floating LNG project off Mozambique launched by Italy-based Eni SpA. The deal is to sell the entire LNG to be produced to BP for 20 years. It formed a consortium with Technip from France and JGC from Japan and the consortium was selected as the preferred bidder for the project, which will bring 3 trillion won (US$2.66 billion) share for Samsung Heavy Industries, in the first quarter.

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