Good news for South Korean shipbuilders is beginning to emerge in the last two months of 2020, after a particularly gloomy 10 months due to lower oil prices and the global pandemic
Norway’s Knutsen OAS Shipping has ordered two LNG carriers, each with a capacity of 174,000 m3, from Korea Shipbuilding & Offshore Engineering (KSOE), the shipbuilding arm of Hyundai Heavy Industries (HHI). The contract, which contains options for two additional vessels, is valued at about US$379M.
While HHI did not specify the European shipowner that ordered the tonnage, BRL Newbuilding Weekly said the order was placed by Norway’s Knutsen OAS Shipping. BRL reported that the LNG carriers had been secured under a long-term charter with Poland.
With an overall length of 299 m, beam of 46.4 m and depth of 26.5 m, the LNG carriers will be built with air lubrication systems to increase operational efficiency, reduce fuel consumption and lower greenhouse gas emissions. Propulsion for each of the vessels will be supplied by a single low-pressure, dual-fuel Otto-cycle WinGD 5X72DF main engine, rated at 21,623 kW. Deliveries of these newbuilds will start in H2 2022.
A sluggish shipbuilding market has weighed heavily on South Korean shipbuilders. In its Q2 2020 results, KSOE reported a KRW0.7Bn (US$624,000) loss, following a KRW44Bn (US$3.9M) profit in Q1 2020. Operating profit in Q2 2019 was KRW59Bn (US$5.3M).
Global shipbuilding orders have reached historic lows, hit by the one-two punch of a volatile oil price market and the Covid-19 pandemic. As of 31 October, South Korean shipbuilders had secured orders for 107 vessels of all types, well below the orders for 175 newbuilds this same time in 2019. Covid-19-related delays have slowed the merger of HHI and Daewoo Shipbuilding & Marine Engineering, while impacting the financial health of a large swath of smaller South Korean shipbuilders.
Medium-sized South Korean shipbuilders Hanjin Heavy Industries, STX Offshore & Shipbuilding and Dae Sun Shipbuilding and Engineering are all on the sales block, reported Business Korea. A sale of STX offshore is expected to be announced shortly, while bids are being reviewed for Hanjin Heavy Industries.
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