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Shipbuilders are starting to sign some big orders

LNG carriers, tankers help companies get close to yearly targets
Oct 02,2018
Korean shipbuilders are starting to get orders for big ticket ships like liquefied natural gas tankers.

Hyundai Heavy Industries (HHI) inked a $210 million order from Norwegian shipper Knutsen NYK Offshore Tankers (KNOT) to build two shuttle tankers for delivery after June 2020, the company said Monday. Shuttle tankers transport oil from offshore oil fields.

The Korean company will start building the tankers from next year at its headquarters in Ulsan.

With that deal, the three shipbuilders under the HHI Group - HHI, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries - achieved 79 percent of the $13.2 billion sales target they set for this year.

In the first nine months of this year, the three affiliates signed orders to build 129 ships worth $10.4 billion, a 60 percent increase year on year. According to HHI, it is the highest sales record since 2013, when they inked orders for 200 ships worth $13.9 billion in the first nine months.

“The shipbuilding market is gradually improving,” a spokesperson from HHI said. “Our focus on high-value added ships like LNG tankers resulted in a good outcome.”

This year, some 31 gas carriers were ordered, including 16 LNG carriers and 12 liquefied petroleum gas carriers, according to the shipbuilder.

The spokesperson added that global shipping lines are asking a lot about LNG carriers, and the company expects to surpass its overall sales target this year.

“Hyundai has been focusing on LNG carriers and tankers, and through the latter half of the year, orders for LPG carriers are also expected to increase,” said Park Moo-hyun, a research fellow at Hana Financial Investment.

On Monday, Samsung Heavy Industries announced it won an order to build a 174,000-cubic-meter (227,583-cubic-yard) LNG carrier for an Asian shipping line for roughly 200.1 billion won ($180 million).

Including that order, the company has signed orders to build 40 ships worth $4.7 billion, achieving roughly 57 percent of its yearly sales target of $8.2 billion.

Hyundai Merchant Marine announced on Friday that it inked deals with all three shipbuilders to build 20 container vessels.

It ordered seven ships capable of carrying 23,000 twenty-foot equivalent units (TEU) each from Daewoo Shipbuilding & Marine Engineering (DSME) and five of the same ships from Samsung Heavy Industries. From HHI, the shipping line ordered eight 15,000 TEU ships.

DSME and Samsung Heavy are planning to deliver the ships by the second quarter of 2020 and HHI by the second quarter of 2021. The ships cost a total of 3.15 trillion won.

State-run Korea Development Bank, Korea Trade Insurance Corporation and other institutions will help financing Hyundai Merchant Marine under the government’s five-year plan to restore the country’s shipping industry by 2022.


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]