President Kwon Oh-kap of Hyundai Heavy Industries

Hyundai Heavy Industries (HHI), the world’s biggest shipbuilder, and a leading offshore facilities contractor, will likely win a 310 billion LNG-floating storage and regasification unit (FSRU) from Gazprom.

HHI has been chosen as the preferred bidder to be awarded the order from the Russian energy company, and chances are high that the company will outbid other Korean shipbuilders, Samsung Heavy industries and Daewoo Shipbuilding & Marine Engineering (DSME). 

An HHI official said on May 3 that Gazprom informed the company it had been selected to be the preferred bidder, but specifics, including the exact price, will be determined through negotiations with Gazprom, and if the order is awarded, it will greatly contribute to improving its business performances. 

Business experts estimate the value of the order at some $295 million (some 316.9 billion won). 

LNG-FSRU is dubbed as an offshore LNG terminal as the facility takes LNG and regasifies it — taking it from the liquid form, where it is reduced 600:1 in volume and expanding it back into a gaseous form where it’s usable to make electricity for homes and other uses.

Each LNG-FSRU is priced between $250 million to $300 million higher than an LNG ship, which is priced at some $200 million.

HHI failed to turn a profit in the first quarter of this year, logging a loss for the sixth consecutive quarter. Reflecting retirement and consolation payments stemming from the current retrenchment, HHI registered an operating loss of 192.4 billion won and a 125.2 billion won net loss, aggravating the company’s business performances. 

The LNG-FSRU Gazprom has ordered will supply LNG to Kaliningrad separated from Russia. Kaliningrad is a seaport city and the administrative center of Kaliningrad Oblast, the Russian exclave between Poland and Lithuania on the Baltic Sea.

EU countries import some 30 percent of their natural gas consumption from Russia. 

This photo shows a LNG-floating storage and regasification unit built by Hyundai Heavy Industries (HHI). HHI has been chosen as the preferred bidder to be awarded an FSRU order from the Russian energy company Gazprom.(Photos:HHI)

Korean Shipbuilding Industry Puts Up a Good Defense Despite Recession

The Korean shipbuilding industry took in 74 percent of global shipbuilding orders in April in terms of compensated gross tons (CGT). Korea’s overall global market share in the first four months of this year reached closer to 50 percent. It means that Korea is now geared to make a turnaround and put up a good defense against China for the past three years.

HHI group, including Hyundai Samho Heavy Industries Co., won orders to build 15 ships in April. Korean shipbuilders, including HHI, DSME and Samsung Heavy Industries, were awarded orders for 22 ships, or 45 percent of 49 ships, up for grabs in April. The figure translates into 990,000 CGT, or 74 percent of a total of 1.34 million CGT. The figure represents a two-fold surge over last year, when Korean companies won 321 ships, or 16.4 percent of a total of 1,953 ships.

Hyundai Heavy Industries Hands Over the World’s Largest Cylindrical FPSO

Hyundai Heavy Industries (HHI) announced today that Goliat FPSO, the world’s largest cylindrical FPSO ordered by Eni Norge, sailed away from its yard.

The 64,000 ton cylindrical ship, measuring 112 m in diameter and 75 m in height, is designed to store one million barrels of crude oil. The FPSO will be installed in the Goliat field in the Barents Sea, 85 km northwest of Hammerfest with start-up expected by mid-2015.

The design and manufacture of the project strictly complied with the NORSOK standards. The FPSO features a cylindrical shape designed to withstand harsh sea conditions.With the 490-meter-long H-Dock, specifically designed to build mega-sized offshore facilities and the two 1,600 ton gantry cranes at its Ulsan offshore yard, HHI has built nine over-two-million-barrel FPSOs to date accounting for more than 60 percent of the world’s market share.