A Leader in LNG-powered Vessel Construction
Samsung Heavy Industries has received a 751.3-billion-won order for 10 Aframax (113,000 DWT) LNG-powered vessels from an Oceania shipping company. These ships will be delivered one after another until January 2022. With this order, Samsung Heavy Industries has achieved 54 percent of its order target for this year, which is US$7.8 billion. Among major Korean shipbuilders, it is approaching the order target in the fastest pace.
Samsung Heavy Industries has landed orders for 29 vessels worth US$4.2 billion so far this year. The order list includes 11 LNG carriers, 14 oil tankers, two petrochemicals carriers, one special ship and a floating production storage and offloading (FPSO) unit, the first offshore plant project of this year. The company is expected to win the Barossa FPSO project from Australia.
The latest order is meaningful for Samsung Heavy Industries. The LNG-powered ships ordered this time are crude oil carriers which use LNG as their fuel. LNG carriers generally use LNG as a fuel but crude oil carriers usually use diesel.
Demand for LNG-powered ships is growing due to the new environmental regulations of the International Maritime Organization (IMO). Compared with diesel oil, LNG can reduce sulfur oxides by 99 percent, nitrogen oxides by 85 percent and carbon dioxide by 25 percent.
Samsung Heavy Industries grasped the global trend early and started the development of technologies for LNG-powered ships ahead of other dockyards.
Since 2012, Samsung Heavy Industries has secured differentiated quality competitiveness in the LNG-powered ship sector by applying LNG fuel tanks and engines (ME-GI and X-DF) of various shapes and materials. The company has developed the “S-Fugas,” an LNG fuel supply system that vaporizes liquefied LNG at minus 163 degrees Celsius and supplies it to a ship's main engine or generator. The system will be applied to the 10 ships ordered this time.
Such endeavors earned Samsung Heavy Industries a worldwide fame as a leader in LNG-powered shipbuilding technology. In June, the company succeeded in developing an LNG-powered very large crude carrier (VLCC) and obtained a Lloyd's class certificate for the ship. Last month, it started building a large-scale facility for verification of next-generation technologies it is developing.
The market for LNG-powered ships is expected to grow gradually. LNG is regarded as the most realistic substitute for high sulfur oil in satisfying the IMO’s sulfur oxide emission regulations (lowering the proportion of sulfur oxide content to 0.5 percent from 3.5 percent) which will be implemented beginning early next year. KOTRA estimates that the LNG-powered ship market will account for 60.3 percent (US$108.5 billion) of new orders in the global ship market by 2025.