South Korean rig builders team up to tackle construction costs

South Korea’s majors rig builders Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding and Marine Engineering (DSME) have teamed up in a Joint Industry Project, looking to cut rig construction costs and project delays.

According to Hyundai Heavy Industries, the three companies recently held a meeting for an “Offshore Design Standardization JIP” with American Bureau of Shipping (ABS) at Houston, Texas.

On the occasion also attended by ConocoPhilips and Technip, the three Korean shipbuilders agreed to join forces to standardize materials, design, and procedures of offshore facilities that vary by project and client by the first half of 2016.

In the absence of common rules for equipment lists, design and work procedures, offshore facilities contractors and clients alike have been facing increases in the number of materials needed and material procurement costs, and project delays with the project-specific procedures, Hyundai Heavy Industries said in a statement on Wednesday.

According to Hyundai, the three Korean major shipbuilders have also been working on standardization with DNV GL since May this year. The plan is to further expand the standardization work with Lloyd’s Register and Bureau Veritas, and to list the common rules on ISO.

Choi Kil-seon, chairman and CEO of HHI, said: “Standardization of offshore design is an essential move to ease material cost increases and project delays, and to enhance our competitiveness in the global offshore market. We hope that the standardization will help lower the entry barrier of domestic offshore facilities equipment manufacturers in the global market.”