Samsung Heavy Industries wins another 7 vessels, totaling $9.2 billion! Year-end order rush.

Following the successful completion of their annual order targets by Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries, another major South Korean shipbuilding company, launched a final push to secure orders in late November. In just two days, they received orders for seven new vessels worth US\$1.3 billion, bringing their total orders for the year to US\$9.2 billion, exceeding their target for the second consecutive year.

On November 23, Samsung Heavy Industries announced that it had signed a contract with an Oceania shipowner for five LNG carriers worth KRW 1.46 trillion (approximately US\$1.08 billion). The new vessels are scheduled to be delivered and put into operation by the end of June 2027. Although Samsung Heavy Industries did not disclose specific information, considering the price per vessel is only US\$216 million, which is below market price, it is speculated that these are LNG carrier orders related to Qatar's "100-ship plan."

South Korean industry insiders stated that LNG carriers are typically high-value-added, environmentally friendly vessels. Samsung Heavy Industries has achieved significant success in the LNG carrier sector this year, thanks to its independently developed LNG fuel propulsion system, reliquefaction system, and energy-saving devices (ESD), as well as its smart ship technology. To date, they have received orders for 35 LNG carriers, accounting for 73% of their total 48 new vessel orders. This surpasses last year's total of 22 LNG carriers and sets a new record for the company's annual LNG carrier orders since its inception.

Including the five LNG carriers recently ordered by Samsung Heavy Industries, the three major South Korean shipbuilders have received orders for 112 LNG carriers this year. Hyundai Heavy Industries Group leads with 39 orders, followed by Daewoo Shipbuilding & Marine Engineering with 38, and Samsung Heavy Industries with 35. Of these 112 LNG carriers, 60 (nearly 54%) are from Qatar's "100-ship plan," including 23 for Samsung Heavy Industries, 19 for Daewoo Shipbuilding & Marine Engineering, and 18 for Hyundai Heavy Industries Group.

On November 22, Samsung Heavy Industries signed a contract with an Oceania shipowner for two shuttle tankers worth KRW 346.6 billion (approximately US\$260 million). This is Samsung Heavy Industries' first shuttle tanker order this year, and the new vessels will be delivered to the shipowner before the end of June 2025. Shuttle tankers are designed to transport oil from offshore oil fields to storage tanks and are equipped with various oil unloading equipment.

Samsung Heavy Industries did not disclose specific information about the shipowner. However, according to sources, the order comes from an affiliate of the Greek oil tanker owner Tsakos Energy Navigation (TEN), and the new vessels will be chartered by TotalEnergies of France.

Previous reports indicated that TotalEnergies would tender for two 160,000-deadweight-ton Suezmax shuttle tankers and had held talks with four shipyards in South Korea and China. These four shipyards are Hyundai Heavy Industries Group, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and Zhoushan COSCO Heavy Industry. It is understood that the price quoted by South Korean shipyards for 160,000-deadweight-ton conventional fuel Suezmax shuttle tankers is approximately US\$130 million per vessel, US\$4 million more than the price quoted by Chinese shipyards. Industry insiders analyzed that the price of the two shuttle tankers ordered by Samsung Heavy Industries is as high as US\$130 million per vessel, US\$10 million more than the US\$120 million price for VLCC newbuilds at the end of October released by Clarksons. Therefore, it is highly likely that these two shuttle tankers are the ones tendered by TotalEnergies.

Shuttle tankers are a type of oil tanker specifically designed for transporting oil from offshore oil fields to land. Due to the high technical requirements for offshore oil transfer, these vessels are mostly equipped with a series of complex loading and unloading systems, as well as dynamic positioning systems and helicopter deck facilities. Their construction cost is far higher than that of oil tankers of the same tonnage, making them a typical high-value-added vessel. The current deadweight of shuttle tankers is mostly between 80,000 and 160,000 tons.

Samsung Heavy Industries has extensive experience and achievements in the design and construction of shuttle tankers. In 1945, Samsung Heavy Industries first entered the shuttle tanker market, becoming the first shipyard in South Korea to build shuttle tankers. To date, out of the 143 shuttle tankers ordered globally, Samsung Heavy Industries has received orders for 64, accounting for 45% of the market share, ranking first in the world. In 2005, Samsung Heavy Industries also received an order for the world's first three bi-directional icebreaking shuttle tankers from the Russian state-owned shipping company SCF Sovcomflot, which were successfully delivered in 2009 and received high praise from the industry. Of the 12 Arctic shuttle tankers currently in operation worldwide, 10 were built by Samsung Heavy Industries.

With the latest seven new vessel orders, Samsung Heavy Industries has received orders for 48 vessels totaling approximately US\$9.2 billion this year, reaching 104.55% of its annual target of US\$8.8 billion, exceeding its annual order target ahead of schedule. This includes 35 LNG carriers, 9 container ships, 2 VLGCs, and 2 shuttle tankers.

Samsung Heavy Industries stated that in 2021, the company received orders for 80 new vessels totaling over US\$12.2 billion, reaching approximately 134% of its annual target of US\$9.1 billion. This was the highest order value in eight years, surpassing the historical high of US\$13.3 billion in 2013. This included 22 large LNG carriers, 44 container ships, and 14 crude oil tankers. With the signing of contracts for two shuttle tankers and five large LNG carriers, the company has exceeded its annual order target for two consecutive years, following last year's success.

South Korean industry insiders stated that in 2021, the average price of new vessel orders received by Samsung Heavy Industries was approximately US\$152.5 million per vessel, while the average price of new vessel orders received this year has reached US\$191.7 million per vessel. This is a result of the company's adjusted business strategy, prioritizing technological competitiveness and selectively focusing on high-value-added, environmentally friendly vessel types such as LNG carriers. Due to the increase in LNG sea transportation, the market demand for LNG carriers is expected to continue for some time. According to Clarksons' forecast, the volume of LNG sea transportation in 2030 will be increased from the previously estimated 580 million tons to 630 million tons, and Shell also predicts that it will reach 700 million tons by 2040.

A Samsung Heavy Industries representative stated: "The company has received large-scale orders for two consecutive years, which will increase the company's operating income after entering 2023, reducing fixed costs and improving profitability due to rising ship prices. The possibility of the company's performance improving is greatly increasing."