SHI to Build World’s Largest Offshore Gas Processing Facility

Samsung Heavy Industries will build the world’s largest offshore gas processing facility. The Company recently executed the LOA for the building of a CPF (Central Processing Facility) with INPEX, a Japanese resources development firm operated in Australia. The CPF is a kind of FPSO, and will produce and process gases from oil fields.

The CPF for which Samsung Heavy Industries has won a contract is 110m wide and 110m deep, and the combined weight of the upper and lower parts reaches 100,000 tons, making the plant the largest one of its kind in the world. The contract amount is also the highest in history for a CPF of its kind, at KRW 2.6 trillion (approx $ 2.3 billon).

A spokesperson for Samsung Heavy Industries said, “The total contract amount will reach KRW 3 trillion after we add certain additional equipment, which will be finalized at the point of signing the contract, to the amount fixed at LOA.” The contract amount is equivalent to lump-sum exports of 100,000 units of mid-sized passenger vehicles worth KRW 30 million, or 3 million units of cutting-edge smart phones. The CPF to be built by Samsung Heavy Industries will be listed by Guinness World Records as the world’s largest offshore plant”.

By signing the EPC-type contract enabling turn-key services integrating design, procurement, production and transportation, Samsung Heavy Industries has gained high recognition for its excellence in offshore plant building once again. The achievement is meaningful in the sense that the Company has been favorably positioned for early entry to the ultra-large offshore plant market. Samsung Heavy Industries and INPEX will have a signing ceremony during February, and construction of the plant will be launched in 2013. The plant will be delivered in the 4th quarter of 2015. INPEX has established a joint venture with Total, a France-based firm, with the parties holding 76% and 24% shares, respectively, and developed Ichthys Gas Field in Browse Mine Lot, 200 km northwest of Australia.

With the CPF, the FPSO and the in-land LNG plant were ordered at the same time. Samsung Heavy Industries won the contract for the CPF, while the order for the FPSO was not placed yet. JKC JV, a Japan-based firm, was selected for the in-land LNG plant construction project. The budget for development of the mine lot is estimated to be about USD 34 billion.

The gases produced and processed at the CPF will be transported to the in-land LNG plant located in Darwin, Australia, through a subsea pipeline with a length of 885 km. INPEX plans to produce condensate of 1 million barrels per day, natural gases of 8 million tons per year and LPG of 1.6 million tons per year, and supply them to Japan and Taiwan.

Industry analysts predict that last year’s nuclear accident in Japan will ignite demand for LNG as an eco-friendly alternative energy source, and that the recent blockade of the Hormuz Str. (US) will lead to continuous oil price hikes. Accordingly, it is expected that efforts to develop gas fields will be further activated across the world.

Samsung Heavy Industries set this year’s target contracting amount as USD 12.5 billion, and is emerging as a shipbuilding and offshore plant construction expert, as it is estimated that the Company will generate about 70% of its revenues in the offshore plant sector.

CEO In-Sik Roh of Samsung Heavy Industries emphasized, “Samsung Heavy Industries is writing a new chapter in the history of the offshore gas plant industry by winning a contract for the world’s largest CPF construction, following its achievement of winning a contract for the world’s first LNG-FPSO, which it has been building since last year.”

CEO Roh revealed his ambition to lead the global market by securing technological excellence.

(1 South Korean won = 0.000892 U.S. dollars)

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Shipbuilding Tribune Staff, February 15, 2012