Hyundai Heavy wins third offshore plant project in 2021

Hyundai Heavy Industries Group’s shipbuilding unit Korea Shipbuilding & Offshore Engineering (KSOE) has landed its third large-scale offshore plant construction project in 2021.

According to KSOE on Aug. 6, the company won an offshore plant order worth 659.2 billion won ($577 million) from a US-based oil developer. For the American company, KSOE will be building a floating production storage (FPS) facility in the Shenandoah oil field located south of Louisiana.

Once constructed, the FPS facility will produce up to 100,000 barrels of oil and 4 million cubic meters of natural gas per day. The facility will be built in Hyundai Heavy Industries’ Ulsan plant in an engineering, procurement and construction (EPC) process. The actual construction will start in the third quarter of 2022, after a year of engineering design.

“We could win another order based on our successful track record in completing the delivery of FPS in June to Murphy Oil Corporation’s King’s Quay project located in the US Gulf of Mexico,” said a KSOE representative.

Earlier this year, KSOE has won a $437 million offshore gas platform project in Myanmar in January and another $744 million FPS and offloading (FPSO) project in Brazil in May. The value of the three projects that KSOE won this year amounts up to 2.01 trillion won ($1.76 billion).

The Korean shipbuilding industry expects that the offshore plant sector will make an even bigger rebound with the rising oil prices. The crude oil price per barrel surpassed $70 at the New York Mercantile Exchange (MYMEX) recently, whereas the industry consensus on the break-even point (BEP) to kick off an offshore oil project is $50 per barrel.

Write to Jung-hwan Hwang at jung@hankyung.com
Daniel Cho edited this article.