Senior Executive Vice President Park Seung-yong of Hyundai Heavy Industries (HHI) signs a deal to with IMI President Fathi K. Al-Saleem to construct a 31,900-ton VLCC at its Ulsan shipyard.

Hyundai Heavy Industries (HHI) signed a deal to transfer architectural design related to the Very Large Crude Carriers (VLCCs) to International Maritime Industries (IMI), a Saudi Arabia-based joint venture among HHI, Saudi Aramco, Bahri and Lamprell, HHI said on Sept. 17. IMI, established in May 2018, is building a shipyard in Saudi Arabia with dedication scheduled for 2020.

According to the agreement, HHI will offer architectural design blueprints for VLCCs, related technological expertise and consulting to IMI. HHI will receive royalties on the VLCCs IMI will build down the road.

HHI built its first own VLCC based on designs the shipbuilder licensed from Scottish shipbuilder Scott Lithgow in 1971. HHI grew up to become the first company to export design tech almost half a century after the production of its first VLCC.

An HHI official said HHI has been recognized for its technology prowess as the world’s No.1 shipbuilder, and the shipbuilder will redouble the development of new technologies leading the global shipbuilding industry.

Meanwhile, HHI struck a deal with IMI and Bahri to construct a 31,900-ton VLCC at its Ulsan shipyard. It is the first time HHI has won an order since the establishment of the joint-venture IMI.

A view of the HHI pavilion set up at Gastech 2019, held in Houston, Texas from Sept. 17 to Sept. 19 (Photos: HHI)

HHI Most Likely to Win World’s 1st LNG-powered VLCC

HHI is most likely to land an order for an LNG-powered VLCC to be built for the first time in the world.

The value of the upcoming order is estimated at 1.8 trillion won, the biggest-ever.

HHI, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering (DSME) are expected to stage a fierce battle to win the value-added LNG-powered VLCC at Gastgech 2019, the world’s largest gas expo, to be held on Sept. 17.

Business sources said HHI signed an LOI with Greece Capital Marine to build 14 LNG-fueled VLCCs, a prior agreement before signing the actual contract. According to the LOI, the VLCCs are 300,000 DWT, LNG-fueled carriers. Such VLCC have so far been 170,000 DWT. If HHI is confirmed to win all 14 LNG-fueled VLCCs as planned, their estimated value will amount to 1.8 trillion won.

LNG-fueled VLCCs have become the subject of attention as they are built to tackle the IMO2020, a newly reinforced environmental regulation for the International Maritime Organization. It goes into effect next year.

Ships making port calls to 170 IMO member countries are required to reduce the portion of sulfur oxides from the current 3.5 percent to 0.5 percent. LNG-fueled VLCCs are more expensive than conventional Bunker C Oil-fueled counterparts, but the former emits very little sulfur oxide.