[GLOBAL ECONOMIC TIMES] Samsung Heavy Industries is on the verge of winning a contract for Mozambique’s ‘Liquefied Natural Gas Production, Storage, and Offloading Equipment (FLNG)’, which is estimated to be worth 2 to 3 trillion won. Samsung Heavy Industries, a powerhouse in marine plants, is discussing receiving orders for about two FLNG units next year.
Samsung Heavy Industries announced in its third quarter performance conference call on the 24th, “The basic design of the ‘Coral Sul’ FLNG, a project in Mozambique, has already begun, and steel plate cutting work is also in progress.” He added, “It’s a question of when to sign the contract,” and added, “We will announce orders in the near future.” When energy companies place orders for offshore plants, they usually entrust the basic design to multiple shipbuilders, but in this case, only Samsung Heavy Industries is working on it, so it is expected to easily win the order.
Considering that the first coral liquor unit ordered by Samsung Heavy Industries in 2017 was worth 2.95 trillion won, this project is also estimated to be worth 2 trillion won. Samsung Heavy Industries is confident of winning FLNG orders next year as well. Currently, we have actually received FLNG orders from U.S. liquefied natural gas (LNG) producer Delphine and Canadian energy company Western, and are coordinating the timing of the main contract. These projects are also expected to be worth 2 trillion won per project.
The company said, “We will first build the products of the company we signed a contract with.” In the past, offshore plants were considered the ‘ugly duckling’ as the biggest cause of shipbuilders’ deficits, but recently, as the market shifted to supplier dominance, they have become a profitable product. In the second quarter, a one-time profit of 25 billion won was added as the ordering party changed some of the construction conditions for the offshore plant.
Samsung Heavy Industries' sales ratio is comprised of 8 to 2 in the merchant marine and marine sectors, respectively, and the company expects the maritime proportion to increase further next year. The company has so far received orders worth 56% of its annual order target (USD 9.7 billion). It is expected that the target will be easily achieved if FLNG is included.
Samsung Heavy Industries said, “In the case of tankers, etc., if the contract size exceeds the amount that can be supplied, we are considering collaboration with other shipyards.”
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