The FSRU built by HD Hyundai Heavy Industries
HD Korea Shipbuilding & Offshore Engineering (009540) is raising expectations for future earnings by winning a series of high-value vessel orders.
HD Korea Shipbuilding said Tuesday it had won orders for one floating storage and regasification unit (FSRU) for liquefied natural gas (LNG) and one LNG carrier. HD Korea Shipbuilding plans to build the vessels at HD Hyundai Heavy Industries (329180) and deliver them to the respective shipping companies by the first half of 2029.
The orders total 885 billion won, comprising 492.8 billion won for the FSRU and 392.2 billion won for the LNG carrier. The FSRU, priced at nearly 500 billion won per unit, is a specialized vessel that regasifies LNG at sea and supplies it onshore, also known as a “floating LNG terminal.” Its advantages include lower initial investment costs and shorter construction periods compared to onshore LNG terminals.
HD Hyundai Heavy Industries holds the world’s largest order record in the FSRU sector, a representative high-value vessel type. In 2014, it became the first in the world to build the 170,000-cubic-meter LNG-FSRU “Independence,” ordered by Norway’s Höegh LNG. Including this latest order, it has secured contracts for a total of 14 vessels to date, leading the global FSRU market.
HD Korea Shipbuilding has won a total of $15.72 billion (133 vessels) this year, achieving 67.4% of its annual order target ($23.31 billion).
By vessel type, the orders include 17 LNG carriers, 28 container ships, 40 LPG, ammonia and liquefied carbon dioxide carriers, 11 crude oil carriers, 33 petrochemical product carriers (PC carriers), 2 car carriers (PCTC carriers), and 2 others (icebreakers, FSRU). The figures reflect a well-executed ordering strategy focused on high-value vessel types led by LNG carriers.
The securities industry is offering a positive outlook for the second half. Han Seung-han, an analyst at SK Securities, said, “The momentum for U.S. shipbuilding and shipping reconstruction policies has been rapidly strengthening recently,” adding, “We can expect the full-fledged momentum of the Korea-U.S. shipbuilding cooperation project (MASGA) starting in the second half.” On June 25, the Korea-U.S. Strategic Investment Corporation, policy financial institutions, and Korea’s three major shipbuilders signed a “memorandum of understanding (MOU) for the effective implementation of Korea-U.S. shipbuilding cooperation investment.”