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Shipbuilders getting orders on advanced technologies

The big three shipbuilders have clinched a series of eco-friendly shipbuilding deals, raising expectations the nation’s shipyards may have finally hit bottom after suffering years of an “order cliff.”

According to industry sources, Wednesday, Samsung Heavy Industries won a contract to build five very large crude carriers (VLCCs) equipped with the shipbuilder’s latest desulfurization scrubbers in September.

Hyundai Heavy Industries (HHI) also inked its biggest deal in five years to build 10 very large ore carriers (VLOCs) propelled by liquefied natural gas (LNG) for domestic shipper Polaris Shipping in September. Polaris Shipping ordered another five VLOCs from HHI last month.

These contracts are about building eco-friendly vessels ahead of the International Maritime Organization’s (IMO) enhanced regulation on emissions of sulfur oxides, which is scheduled to take effect Jan. 1, 2020.

Environment groups claim vessels now emit more pollutants than vehicles do around the world, and the IMO plans to strengthen its sulfur oxide allowance to 0.5 percent from the current 3.5 percent beginning in 2020.

Experts say the IMO regulation is expected to mark a watershed to reshape the entire industry, which has long suffered from the “order cliff.”

Under the regulation, ship-owning companies are required to change their entire fleets into low-sulfur-oxide-emitting or LNG-propelled vessels. They could also install desulfurization scrubber systems on their existing vessels.

“Shipping companies should decided to either change or refurbish their entire fleet to meet the regulation,” a Hyundai Merchant Marine (HMM) official was quoted as saying.

Shipbuilding industry insiders welcome the IMO’s enhanced regulation.

“Korean shipyards’ eco-friendly technologies are far more advanced compared to their Japanese and Chinese competitors,” an HHI official said.

“Also, HHI has recently developed the world’s largest LNG-propelled VLOC together with British Lloyd’s Register. I believe the nation’s shipyards will receive more orders next year thanks to increased demand for eco-friendly vessels.”

Shipping companies are, however, expected to spend a large amount to refurbish or change their ships to meet the IMO regulation. Now the nation’s sole global shipping company HMM is likely to install desulfurization scrubber systems on its 13 vessels. Each scrubber is priced at around 7 billion won ($6.2 million). It has also charted 48 ships.
Source: The Korea Times

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