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Korean Shipbuilders Seeking Offshore Plant Orders

Korean shipbuilders are stepping up their efforts to win orders for offshore plants whose demand is on the recovery amid rising oil prices.

Daewoo Shipbuilding & Marine Engineering (DSME) is expected to sign a contract to build a floating production storage and offloading (FPSO) unit (P-79) with Brazilian state-run energy company Petrobras in July. The facility will be installed in Buzios Field, 210 kilometers southeast of Rio de Janeiro, Brazil.

DSME formed a consortium with Saipem of Italy and participated in the bidding in February. The contract value is about US$2.3 billion. If the contract is signed, DSME will win the first marine plant order in two years since 2019.

Korea Shipbuilding & Offshore Engineering (KSOE) also signed a 2.5-trillion-won construction contract for an FPSO unit (P-78) ordered by Petrobras in May. It was the company’s second offshore plant order, following the one for a gas pressure boosting platform with a capacity of 27,000 tons signed in January 2021.

KSOE will build the hull of the FPSO unit for 850 billion won, while its Singaporean partner Keppel will manufacture the topside of the unit for 1.65 trillion won.

Additional FPSO orders are also expected in the future. Currently, Petrobras has placed an additional order for one FPSO (P-30) and both KSOE and DSME have been qualified to bid for the project. Petrobras currently operates four FPSOs in the region and planning to produce 2 million barrels of crude oil a day by adding eight more by 2030.

Rising oil prices are feeding a recovery in demand for offshore plants. The price of West Texas Intermediate (WTI) hit US$67.72 a barrel on the New York Mercantile Exchange on June 1 (local time), the highest point since June 2018. The price of Brent Crude rose 1.3 percent to US$70.25 a barrel, surpassing US$70.
Source: Business Korea

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