Tuesday, September 26, 2023
HomeHeadlinesKorean Shipbuilders’ Offshore Plant Order Book Expanding


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Korean Shipbuilders’ Offshore Plant Order Book Expanding

Korean shipbuilders’ order book for offshore plant projects are expanding after a long order drought.

Korea Shipbuilding & Offshore Engineering (KSOE) has recently signed a contract with a U.S.-based crude oil developer to build one floating production system (FPS) for 659.2 billion won.

KSOE landed three marine plant projects, including the latest one, in 2021. The combined contract value exceeds two trillion won.

In January, KSOE booked a 50.6 billion won order for one gas compression platform to be used in the Shwe gas field in Myanmar. The company logged an offshore plant order for the first time in about two years since it received an order for an FPS unit worth 513 billion won from LLOG Exploration, a U.S. oil developer.

In May, KSOE signed a contract, together with Singapore shipbuilder Kepel, to build one FPSO unit ordered by Brazilian Petrobras. In the 2.5-trillion-won project, KSOE is in charge of building an 850-billion-won hull with floating and storage functions.

It is the first time in seven years since 2014 that KSOE has won more than two offshore plant orders in a year. The company booked four to 12 marine plant orders every year between 2011 and 2014, but there were no orders at all or only one in a year from 2015 to 2020.

Daewoo Shipbuilding & Marine Engineering (DSME) also logged two offshore plant orders in 2021. The total contract value is around 1.8 trillion won. The first contract of 2021 was about an FPSO unit for Petrobras, Brazil May. DSME’s portion of the 2.6 trillion won contract is 1,094.8 billion won. This is the first large project in seven years for DSME since it landed an order for crude oil production facilities worth 3 trillion won in 2014.

It also won a fixed platform worth 725.3 billion won from North Oil Company (NOC) in Qatar last month. It was the first time in eight years that DSME has secured multiple orders for offshore facilities in a year.

Offshore plants are high-value-added projects worth US$1 billion to US$2 billion per plant, which is five to 10 times larger than the value of a regular merchant ship. But oil prices have plummeted since 2015, bringing an order drought to the Korean shipbuilding industry.

In 2021, orders for offshore plants are coming one after another thanks to expectations for a global economic recovery and the expansion of investment by energy companies due to rising oil prices, analysts say. Industry insiders say that if oil prices rise above US$50 a barrel, offshore oil development projects can generate profits.

In fact, futures of the Western Texas Intermediate (WTI) for delivery in September rose by 94 cents (1.38 percent) to US$69.09 a barrel as of Aug. 5. Brent crude in the North Sea climbed by 91 cents (1.29 percent) to US$71.29 a barrel.

Korea’s three major shipbuilders are seeking to receive additional orders in the second half of 2021. Samsung Heavy Industries is all-out to win the FPSO project of Nigeria’s Bonga South West Aparo (BSWA), which is worth US$1.2 billion, in the second half of 2021. As the company successfully delivered an offshore facility to Nigeria in 2013, it is likely to win the project.

In addition, Korean shipbuilders were reportedly requested to take part in an FPSO tender for an Arctic Ocean oil development project by Equinor, a Norwegian state oil company. KSOE and DSME have reportedly been qualified to take part in a tender for Petrobras’ FPSO.

Source: Business Korea

Related Posts


Finance & Economy
Shipping News

Star Bulk Announces the Repurchase of 10 Million of Its Common Shares

Star Bulk announced that it entered into a Repurchase Agreement (with OCM XL Holdings, LP, a limited partnership incorporated in the Cayman Islands, pursuant...

Trafigura announces executive leadership changes

Trafigura Group Pte Ltd. has announced an evolution of its executive team to further strengthen leadership and focus across its global activities during a...

Woori, HMM, KOBC to buy Polaris in prospective $448 mln deal – report

Polaris Shipping Co. is poised to sell its entire stake at around 600 billion won ($447.5 million) to Woori Private Equity Asset Management Co....

Pyxis Tankers Announces Closing of Ultramax JV Investment

Pyxis Tankers, an international shipping company, reported that on September 14, 2023, the Company closed on its previously announced newly formed drybulk joint venture...

Korea’s STX denies rumor that it is backed by Chinese fund

South Korean general trading company STX Corp. has said its largest shareholder is a local investment firm, while refuting the false reports appearing through...

Baltic index rises to over 4-month high on stronger capesize rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Houston-Japan VLGC freight rates reach multi-year high

VLGC freight rates from Houston to Chiba, Japan, reached $245/mt Sept. 21 for the...

Baltic index snaps 11-session rally as rates for larger vessels ease

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index rises for 11th straight session on strong vessel rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

The elite of the Shipping Industry meets at the “Maritime Cyprus 2023” Conference

The main theme of this year’s Conference is “Shipping in Action: An agenda for...

Drewry: Port Throughput Index Down 2.1% in July

The Global Container Port Throughput Index fell 2.1% MoM in July 2023, with the small rises recorded in Africa and Oceania having been insufficient...

Vopak: Agreement with Infracapital on sale of Rotterdam chemical terminals

Vopak announces that it has reached an agreement with Infracapital on the sale of its three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven)...

Port Hedland Iron Ore Exports Edge Up 4% in August

Pilbara Ports Authority has delivered a total monthly throughput of 62.8 million tonnes (Mt) for August 2023, consistent with the August 2022 throughput. The Port...

Thessaloniki, Gdańsk ports to explore synergies

Thessaloniki Port Authority S.A is expanding its role as a port of international importance through a new cooperation with the Port of Gdańsk Authority...

Hapag-Lloyd CEO: Counteroffer for HHLA would not be in our interest

Hapag-Lloyd CEO Rolf Habben Jansen said on Thursday that it would not be in the container shipper’s interest to make an offer for HHLA...