Samsung Heavy Industries to win World's first LNG FPSO order

Samsung Heavy Industries Co., CEO Jing-Wan Kim, awarded a turnkey contract to UK-Based FLEX LNG to build the world's first LNG-FPSO.

LNG-FPSO, a high-valued added complex vessel, will cost over US $1 billion to construct, including a US $551 million LNG-FPSO top-side plant order.

SHI already won a US $459 million order for supply of an LNG-FPSO hull last April.
SHI developed the LNG-FPSO top-side plant, which is able to produce 1.7 million tons of Liquefied Natural Gas per year.

LNG-FPSO is a self-propelled offshore Liquefied Natural Gas (LNG) floating production, storage and off-loading (FPSO) vessel. As LNG-FPSO is formed by using a top-side plant to liquefy Natural Gas on the LNG vessel, its price is over 4 times as expensive as a large LNG vessel.

Through this LNG-FPSO order, SHI has first occupied the ocean gas-field plant market and has already completed 90% of its yearly target with US $13.5 billion in orders. SHI expects its yearly target to be over US $20 billion because of on-going super projects like drill-ships.

SHI already won orders for 4 LNG-FPSO hulls from FLEX LNG Ltd. last April.

It expects that more orders for top-side plants to be completed soon.

The LNG FPSO, which has a maximum transit speed of 9 knots, will be delivered in 2011 to Nigeria and is scheduled to produce natural gas for 10 yearsafter SHI performs its turnkey process from design to a trial run of the LNG-FPSO.

Based on this order for the 220,000㎥ LNG-FPSO, SHI plans to develop Very Large LNG-FPSO with a capacity of 560,000㎥ next year and establish a mission to make 3~4 LNG-FPSOs on a scale of US$ 4 billion per year.

SHI has secured 40-months of shipbuilding work worth over US$ 50 billion. SHI has recorded its best performance in the shipbuilding industry in terms of its average ship cost, US$ 270 million, of vessels ordered and the high value-added vessel's percentage representing 80% of SHI's total orders.

“SHI is on the right path to be a leading shipbuilder in the Natural Gas Market, having a strategy to develop new-idea ships such as LNG-FPSO, LNG-FSRU (Floating Storage and Regasification Unit), and Arctic Ice Breaking LNG vessels and make them as SHI's main items," SHI CEO Jing-Wan Kim said.<Korea Shipping Gazette>