SHI Closer to Winning US$4 Bil. Orders for LNG Carriers – report

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Expectations are growing that Samsung Heavy Industries will receive large-scale LNG carrier orders from Mozambique and Russia.

Samsung Heavy Industries have recently won orders for four Suezmax crude carriers from two European shipping companies. Norwegian shipping company NAT reported on its website that it has signed a shipbuilding contract with Samsung Heavy Industries, describing the deal as attractive in all aspects, including vessel specifications, quality, prices, and delivery. The vessel will be delivered in 2022.

Although the value of the order was kept under wraps, considering that the current price of a Suezmax tanker is US$55 million per unit, it is estimated to be around US$220 million. It is not a big deal, but is like welcome rain for Samsung Heavy Industries suffering a severe order drought this year. Even with this order, Samsung Heavy Industries’ accumulated order intake for this year amounted to US$1 billion, only 12 percent of its 2020 target of US$8.4 billion.

Samsung Heavy Industries expects a turnaround in the second half of 2020. It is expected to sign a contract with French chemical company Total soon to build eight LNG carriers to be used in a Mozambique gas field.

The shipbuilder also stands a strong chance to receive an order for 10 icebreaking LNG carriers that will carry gas from the Russian Arctic. Novatek, Russia’s state-run energy company, recently placed an order for 10 icebreaking LNG carriers on Russian shipbuilding company Zvezda Shipbuilding, which in turn is expected to give the order to its technology partner Samsung Heavy Industries.

Orders from the French and Russian clients are estimated at US$4 billion, large enough to offset the company’s poor performance in the first half of 2020.

Source: Business Korea

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