DSME targeting offshore equipment

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DSME targeting offshore equipment

Daewoo Shipbuilding & Marine Engineering expects to boost offshore equipment contracts by 34 percent this year and is in talks for its first order for a floating liquefied natural gas (FLNG) plant. The world’s third-biggest shipbuilder may win the order as early as next month, Senior Executive Vice President Ryu Wan-soo said on Monday. The shipyard said in February that it was in talks to build the plant for Petroliam Nasional Bhd.

Daewoo may also get a separate FLNG contract around year-end, which isn’t included in its full-year order target, Ryu said, as energy companies buy gas equipment to meet surging Asian energy use. Investment in liquefied natural gas (LNG) and oil-drilling may help Daewoo win $8.5 billion worth of contracts for offshore products this year, equal to 77 percent of its total order target. “There is going to be quite a lot of demand for offshore equipment,” said Hur Sung-duck, an analyst at HI Investment & Securities in Seoul. “There should be more orders coming from the Middle East in the second half.”

Daewoo has already won $2.2 billion worth of offshore orders this year. The tally includes a $2 billion deal for a floating oil production and storage unit from Tokyo-based Inpex. That was the shipbuilder’s largest contract since 2007. Offshore deals totaled $6.34 billion last year.

The company also expects an order for two semi-submersible oil rigs as early as next month, Ryu said, without naming the customer. The shipbuilder is in talks with Songa Offshore on a potential order for two semi-submersibles, it said on March 28.

Demand for semi-submersibles, which are used in deep water, is rising as energy companies explore new areas, including parts of the North Sea, Ryu said. Energy companies will probably order 15 new rigs industry-wide this year, of which the majority will be semi-submersibles, he said.

“Demand for offshore units is expected to grow for at least two to three years as oil companies plan to spend more on exploration and production,” Ryu said. “We should be able to achieve our order target for this year.”

Samsung Heavy Industries won a $3 billion order from Royal Dutch Shell for a 260,000-ton FLNG facility in May. The 488-meter (1,601-foot) -long plant, to be used at the Prelude field off Australia, will cool gas into LNG so it can be moved by tankers.

“Demand will eventually gain speed,” Ryu said. “Still, the first few steps will take some time because this product is technologically unproven.”

The company may also reach an agreement on a partnership in Brazil by the middle of the year after resuming talks with a shipbuilder in the country, Ryu said, without elaborating. Negotiations were revived late last year after earlier discussions failed to produce a deal, he said.

Hyundai Heavy Industries, Keppel and Sembcorp Marine have already made investments in Brazil, where Petroleo Brasileiro has a five-year plan to spend $224.7 billion. The company is developing the largest crude discovery in the Americas since Mexico’s Cantarell field in 1976. Bloomberg

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