Samsung Heavy Industries Cancels LNG FPSO Order

South Korea’s Samsung Heavy Industries (SHI) has terminated a contract for the construction of a liquefied natural gas (LNG) floating production and storage (FPSO) unit the shipbuilder signed with an European buyer back in January 2009.

News ID: 70636

Date: 04 December 2016 - 11:13

The contract, valued at KRW 907.6 billion (USD 774 million), was canceled due to the buyer’s failing to meet deadlines and obligations set out in the contract, MANA correspondent reported.

The 210,000 cbm LNG-FPSO was initially expected to produce 2.5 million tons of LNG from 2013 onwards.

SHI subsequently agreed to postpone the delivery of the FPSO to December 2015.

The shipbuilder has not disclosed the name of the client so far.

New vessel orders won by South Korean shipbuilders between January-September have fallen by 87 percent compared to the same period in the previous year, steeper than a 72 percent drop in global orders, partly due to less domestic orders compared with competitors in Japan and China.

The nation's big three shipyards, Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries, suffered a combined loss of over eight trillion won last year. It was the first time that all three registered losses, largely due to delays in the construction of offshore platforms and a sharp drop in new orders.