FLASHES & RELEASES

13 May, 2016

Samsung Heavy Loses $4.6 Billion Royal Dutch Shell Order on Oil

Samsung Heavy Loses $4.6 Billion Royal Dutch Shell Order on Oil

Others | KOREA, REPUBLIC OF | 12 May, 2016
Published by : Eco Media Asia


Samsung Heavy Industries Co., the world’s third-largest shipbuilder, said an order to build three floating liquefied natural gas production facilities was canceled after the energy development project was scrapped amid a plunge in oil prices.

The contract, valued at 5.27 trillion won ($4.6 billion), from Royal Dutch Shell Plc was voided because of the current difficult market conditions, the Sungnam, South Korea-based company said in a regulatory filing Thursday. The shipbuilder won the deal in June on the condition that the project will start only after the client is ready to proceed.

Oil prices that have more than halved in the last two years have forced energy companies and rig owners to cancel offshore projects and delay deliveries. As a result, shipyards in Asia such as Samsung Heavy and Singapore’s Sembcorp Marine Ltd. reported losses or smaller profits last year.


Youtube | Prelude FLNG is the world's first floating liquefied natural gas platform,built by
Samsung Heavy Industries and 
Technip in South Korea for Royal Dutch Shell.

Woodside Petroleum Ltd. scrapped plans in March to develop the Browse LNG project in Australia with partners, including Shell and BP Plc, saying it won’t go ahead with the floating LNG development after completing detailed engineering and design work. The Browse partners will prepare a new plan and budget for developing the gas resources, it said.

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.


Article by Kyunghee Park at Bloomberg News
Main Image from Wikimedia Commons