South Korea’s shipbuilder Samsung Heavy Industries(SHI) announced on January 2 that it signed a contract on December 29, 2023 with a North American company for the construction of one floating liquefied natural gas (FLNG) facility worth about KRW 2.101 trillion (approx. USD 1.5 billion / CNY 10.65 billion).
The FLNG is being contracted by a joint venture between SHI and Black & Veatch of the U.S. SHI is responsible for the FLNG hull, LNG enclosure and upper module integration; Black & Veatch is responsible for the FLNG hull and upper module design.
FLNG is more competitive than onshore LNG plants,” said a SHI official. It is expected that as the global demand for LNG grows, the demand for FLNG will also continue to grow. The company has a number of projects in the front-end engineering design (FEED) stage or development stage, and it is expected that we will be able to maintain an order book of one to two FLNGs per year.”
Although, SHI did not disclose more information about the ordering party in its statement, it was reported that in November 2023, Pembina Pipeline, a Canadian oil and gas company, and the Haisla Nation, an aboriginal people of British Columbia, Canada, announced the signing of a shipyard capacity booking agreement with SHI and Black & Veatch for the the proposed Cedar LNG project in Canada. At that time, the parties were expected to finalize an engineering, procurement and construction agreement in December 2023.
The Cedar LNG project is located in Kitimat, British Columbia, Canada and is owned 50% each by Pembina Pipeline and HighSlope Nation. The Project submitted an application for an Environmental Assessment Certificate (EAC) to the British Columbia Environmental Assessment Agency (BCEAA) in 2021 and subsequently entered a 180-day application review phase. In March 2023, the Project received an Environmental Assessment Certificate (EAC) from the Province of British Columbia and in July received an LNG Facility License from the British Columbia Energy Regulator. Upon completion of the regulatory and other approval processes, the project is expected to be operational in 2027.
The FLNG will have a capacity of approximately 3 million tons per year and is planned to extract natural gas from the rich Montney Resource Area in northeastern B.C. The FLNG will be located near the Canadian LNG plant and will be powered by renewable energy sources in British Columbia.
Notably, back in February 2022, SHI was awarded the FLNG front-end engineering and design (FEED) contract for the Cedar LNG project in association with Black & Veatch.
With the above FLNG order placed, SHI’s 2023 FLNG order book has increased to two vessels. As the latest announced FLNG order was signed on December 29, 2023, it marks SHI’s cumulative newbuilding orders for 2023 of 29 vessels (seats) valued at US$8.3 billion, achieving 87% of its annual order intake target of US$9.5 billion. By vessel type, the order includes 16 methanol dual-fuel container ships, seven liquefied natural gas (LNG) carriers, two crude oil carriers, two VLACs, and two FLNGs.
So far, there have been five FLNGs built and delivered globally, four of which are from SHI. Simultaneously, SHI has participated in the FEED of several FLNG projects, laying a solid foundation for the subsequent orders.
SHI has been focusing on research and development of related technologies since 2018, based on the world’s earliest experience of FLNG Phase III construction. In 2020, SHI successfully developed the core technology of FLNG, the LNG liquefaction plant for the first time, and the FLNG constructed in 2021 was successfully commissioned. In May 2023, SHI officially launched its next-generation floating LNG production unit, MLF-N (Multi-purpose LNG Floater-Nearshore), and received Approval-in-Principle (AiP) from DNV.
