Samsung shipyard wins $622 mln order to build 10 gas-fueled crude carriers

20, Aug. 2019

SEOUL, AJU - Samsung Heavy Industries, one of South Korea's three largest shipbuilders, has won an order worth 751.3 billion won ($621.9 million) from a client in Oceania to build 10 crude carriers fueled by liquefied natural gas (LNG) that meet new international regulations on sulfur oxide emissions to be enforced on January 1, 2020.

Samsung Heavy said in a regulatory filing on Monday that it would deliver 113,000 deadweight ton (DWT) LNG-fueled crude carriers sequentially by January 2022 by installing S-Fugas, an LNG fuel supply system for eco-friendly ships. DWT is the weight of all the cargo, fuel, dry provisions and supplies carried on board the ship.

The shipbuilder has secured differentiated quality competitiveness in the LNG fuel propulsion system by applying LNG fuel tanks and engines of various types and materials. S-Fugas vaporizes LNG at the temperature of -163C and supplies it to main engines or generators. “We will continue to lead the eco-friendly ship market by increasing our competitive edge in orders by reducing costs through continuous technology development and localization,” a Samsung Heavy official said.

Samsung Heavy said that its accumulated order so far this year stood at about $4.2 billion. The shipbuilder's target for 2019 has been set at $7.8 billion. In June, an LNG-fueled 300,000-ton very large crude carrier (VLCC) developed by Samsung Heavy received basic approval from Lloyd's Register, a London-based technical and business services organization which provides maritime classification.

South Korean shipbuilders have stepped up efforts to secure a competitive edge in LNG-powered vessels. Compared to conventional fuels, LNG is a proven commercial solution to meet ever-tightening emissions requirements. The Korea Trade-Investment Promotion Agency (KOTRA) predicts that the LNG fuel-powered ship market will account for 60.3 percent, or $108.5 billion, of the world's market for new shipbuilding orders by 2025.

This year, South Korean shipbuilders anticipate a business recovery on solid demand for LNG carriers. They bagged orders to build 60 LNG carriers in 2018. Qatar, a major gas producer, has expressed its willingness to place multiple orders for the construction of LNG carriers at South Korean shipyards.