Hyundai Heavy Industries has confirmed another major offshore newbuilding order in a deal worth KRW 660bn ($580m).
The South Korean shipyard — the world’s largest shipbuilder — has secured the contract to construct a semi-submersible floating production system for delivery in the second half of 2024.
The unit will be installed on Beacon Offshore's flagship Shenandoah project in the US Gulf of Mexico, about 300 km (162 nautical miles) off the coast of Louisiana.
The facility will be able to produce 100,000 barrels of crude oil and 4m cbm of natural gas per day.
This is HHI’s second major offshore contract in four months following Brazilian oil major Petrobras’ decision in May to order another floating production, storage and offloading unit.
The South Korean yard teamed up with Keppel Corp to secure the $2.3bn FPSO, which will see the Singaporean yard fabricate the topside modules, while HHI will build the FPSO’s hull and living quarters.
In mid-June, Daewoo Shipbuilding & Marine Engineering secured an order for an FPSO from Petrobras worth $2.3bn in a tie-up with Italian contractor Saipem.
The global roll-out of Covid-19 vaccines combined with rising oil prices has prompted several analysts to upgrade their estimates for how many offshore projects could be sanctioned.
Final investment decisions
Singapore’s Sembcorp Marine recently said several major offshore production projects will probably head towards final investment decisions in the second half of this year.
“We will focus on winning more high-end offshore facility orders as countries such as Qatar, the US and Latin America are expected to place offshore plant orders amid rising oil prices,” parent Korea Shipbuilding & Offshore Engineering Co (KSOE) said.
KSOE is a holding company of three leading shipbuilders — Hyundai Heavy Industries, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries.
With the US order, KSOE has achieved $17.4bn-worth of newbuilding orders so far this year, exceeding its annual order target of $14.9bn.
As of June, KSOE had an order backlog of 350 ships worth $32.8bn, sufficient to keep the group’s yards busy for the next 30 months.
Separately, HHI has secured approval for its initial public offering, the South Korea Exchange said in a statement, without providing further details.
The shipbuilder is expected to submit its IPO prospectus later this month, according to unconfirmed reports in the South Korean business press.
HHI first unveiled plans for a KRW 1trn IPO in January this year, with the funds raised set to go towards investments in "eco" shipbuilding technology.
