Samsung Heavy wins record $3 billion LNG carrier order; outlook bright

Samsung Heavy Industries Co., a leading South Korean shipbuilder, has swept global orders for LNG carriers, more profitable than oil tankers and container ships, moving one step closer to its annual target of $8.8 billion.

The company said on Wednesday it has clinched a combined 3.9 trillion won ($3 billion) deal to build 14 liquefied natural gas carriers from ship operators in Bermuda and Africa.

A Bermuda shipper ordered 12 large-size LNG carriers (174,000 cubic meters) worth 3.33 trillion won. The deal marks Samsung’s and the Korean shipbuilding industry’s single largest order.

The previous record order for Samsung Heavy was 20 container ships worth 2.8 trillion won in March last year.

Samsung said on Wednesday it has also won an order to build two LNG carriers for an African shipper.

The two deals are tantamount to 59% of the company’s total sales last year.

TO BENEFIT FROM THE EUROPEAN SITUATION

The latest deals bring Samsung Heavy’s ship orders to 33 vessels worth $6.3 billion so far this year, amounting to 72% of its 2022 target of $8.8 billion.

Samsung Heavy, the world’s third-largest shipbuilder by order backlog, is gaining ground in the LNG carrier market by receiving orders for 24 LNG ships year to date.

“We see little difficulty in achieving our annual target thanks to growing demand for eco-friendly vessels,” said a Samsung Heavy official.

Industry watchers said Korean shipbuilders are set to benefit from the Russian invasion of Ukraine as European countries reduce natural gas purchases from Russia and look for alternative sources.

Analysts said the 2022 outlook for Korea’s Big Three shipping companies – Korea Shipbuilding & Offshore Engineering Co. (KSOE), Daewoo Shipbuilding & Marine Engineering Co. (DSME) and Samsung Heavy – is brighter on tighter environmental regulations and new orders to replace aging ships.

With growing demand for new ships, shipbuilding prices are expected to continue their upward trend, keeping Korean shipyards buoyant in coming years, they said.

Write to Kyung-Min Kang at Kkm1026@hankyung.com
In-Soo Nam edited this article.