Samsung Heavy Loses $4.6-bln FLNG Order

By Aiswarya Lakshmi April 29, 2016

South Korea’s shipbuilder Samsung Heavy Industries (SHI), the world’s third-largest shipbuilder, has received a contract termination for three floating liquefied natural gas (FLNG) units from oil and gas giant Royal Dutch Shell Plc.

The deal for the three vessels, worth a total of KRW 5.3 trillion (USD 4.6 billion), was signed between the companies in June 2015.

The contract fromShellwas voided because of the current difficult market conditions, the Sungnam, South Korea-based company said in a regulatory filing.

The three FLNGs were expected to join their owner by the end of November 2023.

With the slump in the shipbuilding market post the global economic crisis SHI had set its sights on offshore accounting for 70% of orderbook in the long term.

Samsung Heavy is currently building two other floating LNG facilities for Shell and Petroliam Nasional Bhd. of Malaysia. The first project is expected to complete work at the shipyard in the second half of this year, the company said.