Korean shipbuilders working on international offshore factory design and process standards

South Korea’s three major shipbuilders will offer a standard model for the design and processing of offshore factories by working with global energy companies.

Daewoo Shipbuilding & Marine Engineering’s Songa project, which ended in March this year, resulted in a loss of as much as one trillion won. The design of the project’s four offshore factories was changed a total of 110 times as the average construction cost fell from 600 billion won to 850 billion won and the delivery of the factories was delayed from 10 months to a year. Daewoo Shipbuilding & Marine Engineering filed for arbitration with the London Maritime Arbitrators Association, claiming that Songa Offshore, the contracting agency, was compensating the loss.

The three main South Korean shipbuilders, namely Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, plan to work together to avoid such losses incurred by offshore factory projects. In this context, they launched an international project early last month with energy companies and global design companies and will come up with a standard model for the design and processing of offshore factories by the second half of the year. next.

The joint industrial project is joined not only by the three shipbuilders, but also by the American Bureau of Shipping, DNV GL, Chevron, Royal Dutch Shell and engineering companies such as Technip and Modec. In addition, Exxon Mobil, BHP Billiton Petroleum, Total and Statoil are expected to join.

South Korean shipbuilders expect this standardization of the business model to lead to a higher level of competitiveness as well as reduced losses. In addition, South Korean equipment manufacturers can increase their presence in the offshore installation market through component standardization. At present, the equipment and components produced in the country represent only about 20% of that used by South Korean offshore plant builders.

Leon E. Hill

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