HD KSOE bags $2.3 bn in vessel orders, achieves 90% of 2023 target

South Korea’s biggest shipbuilder HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE) has recently bagged over 3 trillion won ($2.3 billion) in orders, buoying its cumulative ship order value for this year to reach 90% of its entire 2023 sales target.

According to multiple regulatory filings by the interim shipbuilding holding company under HD Hyundai Co., formerly Hyundai Heavy Industries Group, on Monday, its shipbuilding subsidiaries won a combined 3.12 trillion won worth of orders to build a floating production unit (FPO), two liquified petroleum gas (LPG) carriers, two liquefied natural gas (LNG) carriers and four pure car, truck carriers (PCTC).

With the latest orders, HD KSOE has won $14 billion in orders from January to June of this year, making up 90% of its annual order target of $15.7 billion for 2023.

This is also the first time that the Korean shipbuilding giant has secured an offshore floating production unit order since 2021 when it won an order for a 660 billion won floating production system from a US oil exploration company.

Offshore floating production units are much more expensive to build than general sea carriers, generating higher profit, said a company official.

HIGH-VALUE-ADDED VESSELS

HD KSOE's shipbuilding subsidiaries will share the latest orders.

HD Hyundai Heavy Industries Co. will build the 44,000-ton offshore FPU for Australia-based Woodside Energy Group Ltd. for 1.56 trillion won, accounting for about half of the total order value.

The FPU, capable of producing 100,000 barrels of crude oil and 4.1 million cubic meters of natural gas per day, will be deployed in an oil field 180 kilometers off the east coast of Mexico in the first half of 2027, according to the shipbuilder.

HD KSOE said another unit Hyundai Mipo Dockyard Co. will construct the PCTCs, each of which are 200 meters long, 38 meters wide and 37.7 meters high, for a shipping company in the Middle East.

Each PCTC will be able to carry 7,500 units of cars once they are delivered to the owner by 2027.

This is HD KSOE’s first PCTC order for this year amid growing demand for PCTCs in line with increasing EV exports. The construction cost of a PCTC is double that of an LPG carrier.

The shipbuilding unit also will build the two units of 40,000-cubic-meter LPG carriers for a European shipper, with an aim to deliver them by 2026 in phases, HD KSOE said.

The two units of LNG carriers will be constructed by Hyundai Samho Heavy Industries Co. at its shipyard in Yeongam, 308 kilometers south of Seoul.

The 174,000-cubic-meter LNG carriers, worth 686.1 billion won in total, will be delivered to a shipper in North America by 2027 in phases.  

Given that its local rival Samsung Heavy Industries Co. also aims to deliver its LNG carrier order by 2028, Korean shipbuilders’ total order backlog is at nearly four years. When delivered, the deals will bring an improvement in Korea's trade balance figures three to four years down the line.

As orders to build eco-friendly vessels increase, HD KSOE will continue to focus on high-value-added vessels for the foreseeable future, a company official said.

Write to Jae-Fu Kim at hu@hankyung.com

Sookyung Seo edited this article.