South Korea’s Samsung Heavy Industries has once again secured a high-end FLNG order, further solidifying its leading position as the “strongest FLNG shipyard” in the global offshore engineering sector.
Recently, Samsung Heavy Industries announced that it has signed a front-end engineering design (FEED) contract for a floating liquefied natural gas (FLNG) unit with an African shipowner, valued at 869.4 billion KRW (approximately $635 million or 4.55 billion RMB). This amount accounts for 8.8% of the company’s 2022 revenue of 9.9031 trillion KRW.
This contract includes pre-production design work prior to the formal agreement. Given the long intervals between offshore equipment orders and the high technical complexity, securing this order is seen as a key indicator of Samsung Heavy Industries’ technical capabilities, reaffirming its world-class competitiveness in the offshore equipment sector. Notably, before signing this contract, Samsung Heavy Industries had already reached an agreement with the shipowner and commenced actual work on February 18.
This contract is reportedly for the second FLNG unit under the Coral Sul project in Mozambique by Italy’s ENI Group. Samsung Heavy Industries had already begun production design for this FLNG earlier this year. The formal construction contract, worth up to $2.5 billion (approximately 17.938 billion RMB), is expected to be finalized soon.
The basic design of this FLNG will be identical to the first Coral Sul FLNG unit previously built and delivered by Samsung Heavy Industries. In 2021, the company delivered the Coral Sul FLNG, the world’s first FLNG deployed in deep waters at a depth of about 2,000 meters. The vessel measures 432 meters in length, 66 meters in width, and weighs approximately 140,000 tons, with an annual production capacity of 3.4 million tons of LNG, making it the second-largest FLNG in the world.
Including this FEED contract, Samsung Heavy Industries has secured orders for 19 new vessels worth $3.3 billion (approximately 23.68 billion RMB) this year, achieving 34% of its annual order target of $9.8 billion. These include 1 LNG carrier, 9 shuttle tankers, 2 very large ethane carriers (VLECs), 4 crude oil carriers, 2 container ships, and 1 FLNG unit.
A Samsung Heavy Industries representative stated, “Since the outbreak of the Russia-Ukraine conflict, global energy security concerns have intensified. With shifts in U.S. energy policy, investments in offshore equipment have continued. Moving forward, the company will focus on planned projects, aiming to secure 1-2 offshore orders annually.”
Samsung Heavy Industries anticipates securing at least 4 FLNG orders this year, totaling approximately $5.5 billion (about 39.464 billion RMB). In addition to Italy’s ENI Group, three other energy companies—U.S.-based Delfin Midstream, Canada’s Western LNG, and Norway’s Golar LNG—are expected to sign FLNG construction contracts with Samsung Heavy Industries this year.
FLNG, known as a “floating LNG factory,” is a mobile, integrated facility that produces, processes, stores, and offloads LNG at sea. As a production unit that covers drilling to liquefaction, it eliminates the need for onshore liquefaction storage or subsea pipelines, offering the advantage of protecting marine ecosystems. Driven by lower unit costs, standardized designs, and growing demand for rapid LNG production, the global FLNG market has been accelerating in recent years.
FLNG construction is highly technically demanding, ranking among the most complex, expensive, and high-value-added products in the offshore engineering sector. It is often referred to as the “new crown jewel” of the shipbuilding and offshore industry, with profit margins typically in the double digits. Currently, Samsung Heavy Industries holds a 55% share of the global FLNG market, making it the undisputed leader in this field.
Samsung Heavy Industries is recognized as the “global FLNG powerhouse.” Clarksons data shows that, to date, there have been only 10 new FLNG orders worldwide, with Samsung Heavy Industries securing 5 of them. The company has successfully delivered 3 FLNG units, including Shell’s $3.6 billion Prelude FLNG in June 2017, Malaysia’s Petronas’ $1.5 billion PFLNG DUA in February 2020, and Mozambique’s $2.54 billion Coral-Sul FLNG in November 2021.
Notably, Samsung Heavy Industries specializes in large-scale FLNGs. The Prelude FLNG is the world’s largest, measuring 489 meters in length and 74 meters in width, with a displacement of approximately 600,000 tons. It can produce 3.6 million tons of LNG, 1.3 million tons of condensate, and 400,000 tons of LPG annually. The Coral-Sul FLNG, with an annual output of 3.4 million tons, is the world’s second-largest FLNG after Prelude.
Currently, Samsung Heavy Industries has two FLNGs under construction: Malaysia’s Petronas’ third FLNG, the PFLNG TIGA, worth $1.538 billion, which was launched in February this year; and Canada’s Cedar LNG project FLNG, secured last year, valued at approximately $1.5 billion.
