On December 1, Korea Shipbuilding & Offshore Engineering Co., Ltd.(HD KSOE), the intermediate holding company of HD Hyundai Group’s shipbuilding business, announced that it has recently signed a contract for the construction of four Very Large Liquid Ammonia Carriers (VLACs) with a European shipping company, with an order value of KRW 557.4 billion (US$432.4 million/approx. RMB 3,087 million), at the price of US$108.1 million per vessel. The new vessels will be built by Hyundai Samho Heavy Industries(HSHI) and are expected to be delivered to their owners in succession in the second half of 2027.
With these orders, HD KSOE has secured orders for 23 new vessels in this new shipbuilding segment, accounting for approximately 61% of the market share of the 38 ultra-large liquefied petroleum gas (LPG)/ammonia carriers ordered globally this year.
Including the latest order, HD KSOE has taken orders for 155 new vessels worth US$21.822 billion so far this year, accomplishing 138.7% of the annual order target of US$15.74 billion. In term of vessel type, the order book includes 39 LNG carriers, 37 product tankers, 29 container ships, 34 LPG carriers, 7 tankers, 4 car carriers (PCTC), 2 ethane carriers, 2 liquefied carbon dioxide (LCO2) carriers, and 1 FPU.
Up till now, HD Hyundai Group is the only shipbuilding company in South Korea that has achieved its annual order target. Hanwha Ocean has taken orders for 16 new vessels valued at US$3 billion, realizing 43% of the annual order target of US$6.98 billion. Samsung Heavy Industries has taken orders for 26 new vessels valued at $6.6 billion, which is 69% of the annual order target of $9.5 billion.
Currently, ammonia is being touted as the next generation of environmentally friendly fuels and has become one of the leading candidates in the shipping industry’s quest for alternative cleaner marine fuels. Unlike traditional marine fuels such as heavy fuel oil, ammonia does not produce carbon dioxide when burned and can be produced using renewable energy sources such as wind or solar power, making it a versatile and environmentally friendly energy carrier that meets increasingly stringent greenhouse gas emission requirements and the International Maritime Organization (IMO) 2050 targets. With the expected gradual expansion of demand for ammonia fuel and the co-development of marine equipment such as dual-fuel engines, the demand for ammonia carriers with a stable supply of ammonia will continue to grow.
In September 2021, HD KSOE successfully launched the shipbuilding industry’s first ammonia fuel supply system developed in-house and received Approval-in-Principle (AiP) from the Korean Register (KR). The system, which allows commercial ships to use ammonia as a marine fuel, is capable of utilizing ammonia evaporated gas generated during navigation, removing nitrogen oxides from exhaust gases, and using the remaining vapors as engine fuel. To ensure safety at sea, the system is also equipped with a dual anti-gas leakage handling system.
In September this year, HD KSOE and HD Hyundai Heavy Industries received an AiP from the American Bureau of Shipping (ABS) for an ammonia reductant supply system developed for selective catalytic reduction (SCR) systems in ammonia-fueled ships.
The AiP also covers a program for the safe handling of toxic ammonia gas generated during operation, including a configuration that uses ammonia evaporated gas (BOG) and purge gas generated by the ammonia fuel supply system as the SCR reductant. The system utilizes ammonia carried on board as the SCR reductant to remove NOx from emissions rather than using urea from conventional diesel propulsion.
HD Hyundai Heavy Industries said that ammonia is expected to become a mainstream alternative fuel in the future, considering the recent tightening of environmental regulations, and will actively develop ammonia-related technologies in the future. The newly developed ammonia reductant supply system is one of the results of the R&D efforts and is expected to contribute to the efficient operation of ammonia carriers.