HD Hyundai Marine bags order to upgrade Chevron LNG tankers

HD Hyundai Marine Solution Co., a ship maintenance, retrofitting and digital solution provider under HD Hyundai Co., has won an order from Chevron Corp. to install emission-reducing systems on the latter’s liquefied natural gas (LNG) carriers, the South Korean company announced on Thursday.

Under the deal's terms, HD Hyundai Marine will add re-liquefaction systems, hull air lubrication and new gas compressors to Chevron’s two LNG tankers, according to the statement.

With the latest deal, the Korean marine service company has bagged $100 million worth of re-liquefaction system orders since June last year.

The company won its first order to install re-liquefaction systems from a Norwegian ship owner on the latter’s five LNG carriers. The value of the deal was about $10 million per ship.

BLUE OCEAN BUSINESS

A re-liquefaction system helps minimize the loss of gas and cut carbon emissions during vessel operations by re-liquefying boil-off gas (BOG), and demand for such systems is on a steady rise under stricter International Maritime Organization (IMO) regulations to reduce ocean pollution.

Considering that many LNG vessels delivered before mid-2010 are not installed with these systems, its orders are expected to climb further onwards.

There are about 100 relatively new LNG carriers without re-liquefaction systems and the total cost to install the eco-friendly technology on them is estimated at $700 million.

Chevron is one of the major ship operators actively seeking to cut its carbon footprint and has been upgrading its energy-delivering vessels to make them greener.

About a year ago, the multinational energy company also asked a Singaporean vessel maintenance, repair and overhaul (MRO) company to install re-liquefaction systems along with other eco-friendly technologies on its LNG tankers.

HD Hyundai Marine plans to develop a wide range of eco-friendly marine technologies to lead the vessel retrofitting market set to burgeon in line with tightening marine environment protection regulations, the company said.

The company was founded in 2016 originally as Hyundai Global Service but changed its name to HD Hyundai Marine in November last year to expand its business beyond vessel aftersales services.

It is actively seeking to expand its presence in the vessel retrofitting, bunkering and digital solution sectors.

It was in talks with several customers to retrofit aged LNG tankers to floating storage regasification units (FSRUs) last year. 

It is also eyeing the growing vessel repair service market. Most ships have a lifespan of 20 to 30 years but they need maintenance work on engines and other components after three years of sailing.

Thanks to the aggressive business diversification, the company’s operating profit nearly tripled to 142 billion won ($107 million) in 2022 from 2017 on sales of 1.3 trillion won, up a whopping 555% over the same period, according to the company. 

It is affiliated with HD Hyundai, the parent of the world’s No. 1 shipbuilder HD Hyundai Heavy Industries Co.   

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.