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Samsung Heavy close to winning $2.5 bln deal for offshore LNG facility

Samsung HeavySamsung Heavy Industries Co., a financially troubled South Korean shipyard, has virtually secured a $2.5 billion deal to build a floating liquefied natural gas facility abroad, industry sources said Sunday.

The shipbuilder, a unit of Samsung Group, is leading a consortium made up of French multinational Technip and Japan’s JGC in the project, valued at a total of $5.4 billion. The order has been placed by the Italian hydrocarbon company ENI.

“It’s safe to say that Samsung Heavy has virtually won the contract. It will be signed around October,” said an informed source who did not want to be named.

Samsung Heavy has been in negotiations with ENI since the first quarter of this year on detailed business plans.

If successfully concluded, the deal will be worth $2.5 billion to the company.

It will be of great help to self-restructuring efforts under way by Samsung, which has not been able to win a single new shipbuilding order this year.

Samsung Heavy is one of three major South Korean shipyards, along with Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering Co.

They have been struggling to stay afloat amid an industry wide slump and mounting losses.

Hyundai Heavy, meanwhile, said it handed over the world’s largest semi-submersible drilling rig to Diamond Offshore Drilling Inc. of the U.S. last week as scheduled.

In 2013, Hyundai won the $630 million order to build the Ocean Greatwhite, 23 meters in length and 78 m in width. It can operate in waters 3,000 m deep with a drilling range of 12.2 kilometers below the sea’s surface.

Hyundai received around 460 billion won for the delivery, a company official said.

The Original Posted by lcd@yna.co.kr/Yonhap News