Samsung to build 10 LNG-FPSOs over the next 15 Years

Samsung Heavy Industries (SHI) announced that Royal Dutch Shell PLC selected SHI, along with its French consortium partner Technip, as the primary contractors for the construction and long-term supply of LNG-
FPSOs. A basic contract was signed to confirm this.

Under the contract signed in Paris between Vice Chairman Kim Jing-wan and Executive Vice President of Royal Dutch Shell PLC Matthias Bichsel, SHI will not only be the exclusive supplier to Royal Dutch Shell of large LNG-FPSOs for the next 15 years, but will also receive LNG-FPSO orders that together
will be the largest orders in the history of the global shipbuilding industry.

According to the contract, SHI will be the exclusive supplier of large LNG-FPSOs ordered by Royal Dutch Shell PLC for a period of up to 15 years. The two parties will negotiate further in the future on some points of the agreement, such as the price and delivery date of the structures, according to the waters in which the LNG-FPSOs will be stationed. Industry experts predict that as many as 10 FPSOs priced at USD five billion each (total of USD 50 billion) will be ordered.

SHI won this order on the strength of its track record of delivering two FPSOs for oil production purposes to Royal Dutch Shell PLC in 2002, developing the world’s first LNG-FPSOs last year, and winning all five orders for ships placed by Royal Dutch Shell PLC earlier this year.

SHI will come up with a basic design for LNG-FPSOs starting early August in collaboration with Technip, a renowned French engineering company, and will sign a final contract early next year that reflects the design.

The LNG-FPSO structure can store up to 450,000 which is enough LNG to supply Korea for three days. It will produce 3.5 million tons of natural gas per year from off-shore gas fields near Australia’s Northwest coast starting in 2016.