Korean shipbuilders win consecutive orders despite coronavirus pandemic

LNG carrier built by Hyundai Heavy Industries. HHI via The Korea Herald/Asia News Network

SEOUL — South Korean shipbuilders have won orders one after another in recent months after suffering from a dismal performance in the first half of this year. Expectations are growing that they will continue to win more liquefied natural gas carrier orders in the latter half despite the pandemic.

Korea Shipbuilding & Offshore Engineering, the shipbuilding holding unit of Hyundai Heavy Industries Group, said Tuesday it had won orders worth more than 1 trillion won ($837 million) in a week.

KSOE signed contracts with ship owners from Europe and Bermuda for four 174,000 cubic meter LNG carriers, two 50,000-ton petrochemical carriers and one 1,000-passenger, roll-on/roll-off ferry.

Hyundai Mipo Dockyard will construct the ferry, the contract for which is worth 108 billion won, equivalent to 3.61 percent of recent revenues. The contract period is from July 31, 2020 to Nov. 30, 2022.

The LNG carriers, which were the first to be ordered from a Korean shipbuilder this year, will be equipped with dual-fuel propulsion engines (X-DF) and nitrogen oxide reduction systems (SCR), which greatly reduce pollutant emissions, the shipbuilder said.

These vessels will be built by Hyundai Heavy Industries and Hyundai Samho Heavy Industries and will be used for the charter of global energy company Shell in August 2023.

KSOE said discussions were also underway on other LNG carriers, including for LNG projects in Qatar and Mozambique.

The same day, KSOE’s smaller rival STX Offshore & Shipbuilding said it had signed a contract with a Korean shipping company for three tankers, its first order in about eight months.

STX said the ships meet the International Maritime Organization’s tightened environmental regulations and have applied additional eco-friendly technologies such as linear optimization and installation of energy-saving devices, LED lighting systems, and frequency control ventilation systems.

The price of the vessels, to be delivered from the first quarter of 2022, has not been disclosed at the request of the ship owner, the shipbuilder said.

“We hope that this order will serve as a catalyst for additional orders of the flagship middle range tankers, which are under negotiation with a number of ship owners,” a STX official said.

Park Moo-hyun, a researcher at Hana Financial Investment, said, “The increase in LNG demand will be steep in the future, due to global eco-friendly policies.”

“As Chinese shipbuilders frequently show technical defects or fail to meet delivery schedules on time, Korean shipbuilders’ positions in the LNG carrier market are expected to become stronger.”