South Korean Shipyards Underline Dominant Positions
- Pipeline
- Saudi Aramco News
- Industry News
Author: Aramco ExPats
Released 3 August 2006
In late May, the three largest South Korean shipyards, Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering Company, underlined their dominant position in the Middle East oil and gas carrier market by sharing an estimated $4,000 million order from Qatar Gas Transportation Company.
Orders are already abundant. In March, Vela International Marine, the shipping company of Saudi Aramco, contracted Daewoo Shipbuilding & Marine Engineering to build six VLCC tankers. Each of the 318,000-dwt vessels will have capacity to transport 2.2 million barrels of crude oil, with the first due for delivery in the first quarter of 2008.
“Overall, material prices (doubling in the price of steel plate to $600 a ton over the past two years) have increased and this will impact our delivered price for gas carriers and oil tankers,” said MH Lee, Samsung Heavy Industries’ shipbuilding and offshore division manager.
Korean shipbuilders are newcomers to the LNG shipbuilding market, having only built their first vessel in 1996. “We have come a long way since. Japan lost out because of a lack of engineers and manpower. We have 15,000 staff at our yard alone,” says Lee.
New competition is not far off, with Chinese shipyards gearing up to enter the global marine energy transportation sector. But having seized the initiative, South Korean yards have no intention of giving up their dominant position or their special relationship with their Middle East energy clients.