A view of the Bongko offshore platform installed off the sea southeast of Bangkok, Thailand by Hyundai Heavy Industries. (Photos: HHI)

Hyundai Heavy Industries (HHI) is participating in Aramco’s offshore oil and gas production facility projects in earnest.

Global attention is focused on the possibility the latest move, part of HHI’s efforts to expand collaboration with the Saudi state-owned oil company, will give the company a leg up for HHI to overcome an order drought in the offshore plant engineering business.

According to foreign news outlets, HHI signed an MOU on a long-term agreement (LTA) contractor with Aramco at In-Kingdom Total Value Add (IKTVA) forum held in Dammam, Saudi Arabia, from Feb. 24-25.

HHI is the sole Korean company among 10 LTA contractors qualified for their participation in a variety of projects related to Aramco-owned offshore oil and gas field.

LTA contractors will be allowed to implement oil and gas field works, platform, pipelines, cables and other equipment projects.

HHI’s signing the deal with Aramco takes on significance as the Saudi state-owned oil company is expected to place orders on more than 100 engineering, procurement, fabrication and offshore installation (EPIC) and test-operation projects related to its own offshore oil and gas fields for the next six years.

The value of orders, to be placed each year, is estimated at $3 billion (about 3.6 trillion won), and the total could reach $20 billion (23.8 trillion won) for the next six years, opening a huge offshore plant engineering market, industry analysts said. Details on offshore plant engineering orders have yet to be discussed, and HHI’s signing the LTA could raise the possibility of winning orders, said an HHI official.

Of late, the Korean shipbuilding industry has seen signs of recovery on the back of winning orders for value-added ships like LNG carriers from abroad and super-size container ships in Korea.

But the offshore plant engineering business, which played a pivotal role in the booming Korean shipbuilding industry, has been reeling from a shortage of winning orders.

As crude oil prices have declined, outlooks of winning offshore plant engineering orders are still dark, shipbuilding industry officials said.

Aramco decided to acquire a 19.9 percent stake in Hyundai Oilbank, a subsidiary of HHI Group, as part of efforts to expand collaboration with HHI Group in diverse sectors. It is noteworthy that HHI Group’s joint shipbuilding and other projects with Aramco have been spearheaded by HHI Senior Executive Vice President Chung Ki-sun, which has been emerging as a next-generation leader of the group.

A view of a supersize LPG carrier on a test operation, built and delivedred by Hyundai Heavy Industries.

HHI Group Wins Another VLGC Order from KSS Line

HHI Group won an 84,000 cbm very large gas carrier (VLGC) order from the Korean shipping company KSS Line.

HHI recently signed a deal on a VGGC order worth 91 billion won with KSS Line. The latest winning order brought to five the number of VLGCs of the same size HHI group has clinch from KSS Line since last year.

The ship stands at 230 meters in length, 32.25 meters in width and 23.75 meters in height. Shipbuilding is to be launched at HHI’s Ulsan shipyard in September, and it is to be delivered to the ship owner in August 2021.