Samsung Heavy Industries eyes FLNG and FPSO projects in Indonesia
Thursday, September 22 2011 - 08:30 AM WIB
Samsung Heavy Industries, one of the ?big three? giant ship builders in South Korea, is looking to offer floating LNG (FLNG) and floating production, storage and offloading (FPSO) vessels to Indonesia given expected rising demand for both FLNG and FPSO vessels in the country in the coming years.
?There are possibilities. We are seriously looking to offer FLNG units to Indonesia,? said Daniel C.S. Ahn, Chairman and CEO of Offshore Plant Technology Services Co, who is also technical adviser for Samsung Heavy Industries.
The reason why South Korean shipbuilders are looking to Indonesia is because South Korea is the second biggest importer of LNG from Indonesia after Japan.
?South Korea imports gas from Indonesia, Malaysia and Australia. We are next to Japan as the largest LNG importer country. Therefore, we are actively looking to market FLNG,? Ahn, who is also former president of Hyundai Heavy Industries, told Petromindo.com on the sideline of the FPSO 12th Annual Congress in Singapore.
South Korea shipbuilders are among major developers of FPSO/FLNG hulls in the world. The key producers of FPSO and FLNG companies in South Korea are Hyundai Heavy Industries, Samsung Heavy Industries and Daewo Shipbuilding & Offshore Engineering. They are three big players,? said Ahn.
Among major oil and gas companies that are planning to utilize FPSO and FLNG in Indonesian waters are Inpex? Abadi gas field and ExxonMobil?s Cepu project in East Java.
Compared to FPSO, FLNG is relatively new but it is expected to grow in the coming years given increasing gas exploration and exploitation activities in deep waters.
He admitted that some Indonesian companies are now seeking to utilize FLNG for eastern Indonesian fields. According to Ahn, the founder of Hyundai Heavy Industries, utilizing floating production and storage facilities both for oil and gas are logical choice.
?There is a limit for laying down pipe for deep sea. There is only one way to do it, namely utilizing an FLNG vessel. It is not cheap, but there is no other way,? he said.
Since 2001, the big three ship builders have built 20 FPSOs ordered by major oil and gas companies in the world such as ExxonMobil, BP, Total, Chevron and Shell. The cost to build medium to large size FPSO and FLNG vessels stood at between US$1.5 billion to US$2 billion.
?I think FLNG is growing technology, compared to FPSO. FPSO is a proven technology,? he said, adding that Korean firms may have to work with local partner to adapt with Indonesia?s cabotage policy.
According to Ahn, the key success of South Korea?s FPSO and FLNG production is because the country has world class shipbuilding facilities. ?South Korea have platforms to build large FPSO, so oil and gas companies feel comfortable. They keep coming.?
He said Chinese shipyards have entered the foray in developing the multi-billion floating production and storage facilities. However, Ahn said, the Chinese shipyards have yet to carry out works for major oil and gas companies. Therefore, he does not see competition from Chinese companies in the immediate future.
Samsung Heavy Industries largest contract was the FLNG vessel worth US$3.03 billion for Royal Dutch Shell which was signed in June this year. The contract includes $1.175 billion for hull.
The signing of the offshore production and storage facility contract means Samsung has secured FPSO and FLNG orders worth $10.5 billion so far this year, representing 91 percent of its annual target of $11.5 billion. (roffie)