Samsung Heavy loses giant FLNG order

Samsung Heavy Industries, one of the world’s largest shipbuilders, has lost a potentially huge order it had for the construction of three FLNG units.

Namely, Samsung Heavy Industries had, in joint venture with Technip, won a front-end engineering design (FEED) contract for the Woodside-operated Browse FLNG project, offshore W. Australia.

Additionally, a contract potentially worth $4.7 billion, was signed for the engineering, procurement, construction and installation of the three FLNG units of the Browse project. This contract was subject to the final investment decision from the client at the end of the FEED. 

However, Woodside in March said it would not move forward with the development at this time considering the current economic and market environment.

The Browse project had entailed construction and installation of three FLNG units to develop the Brecknock, Calliance and Torosa fields in the Browse Basin, 425 kilometers North of Broome, Western Australia.

Regarding the FLNG contract cancellation, Offshore Energy Today has managed to obtain a statement from Shell, the second largest partner in the Browse joint venture.

A Shell spokesman said: “Following the decision by the Browse Joint Venture Partners not to proceed with the current concept for Browse due to the prevailing economic and market environment, we can confirm that the FEED contract for Browse FLNG with the Technip-Samsung Heavy Industries Consortium (TSC) has been terminated by the Operator.

“Consequently, the Engineering, Procurement, Construction and Installation (EPCI) contract for Browse FLNG is no longer required and has also been terminated. However, this EPCI contract had no monetary value – it would only have been activated once final cost numbers were determined in FEED to support an FID, and a Notice to Proceed issued, followed by a transfer of the contract to the Browse Operator.” 

Samsung Heavy Industries is currently building what has been dubbed the world’s largest floating offshore structure – Shell’s Prelude FLNG. The Prelude FLNG facility will be 488m long, 74m wide and along with its contents, will weigh around 600,000 tonnes.

No delivery timeline has been revealed, but the Australian media have speculated that the facility is two years late, around $8 billion over budget, and not expected to produce LNG before 2018.

Once delivered, the facility will be towed to its location, some 475 kilometers north-east of Broome, Western Australia, to the namesake gas field. There the facility will be moored and connected to the undersea infrastructure and the whole production system commissioned.

Offshore Energy Today Staff