April 19, 2024

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The proposed merger between Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering is expected to double the value of their outstanding orders for LNG ships to over US$12 billion, industry data showed on Feb. 19.

HHI, the world’s largest shipbuilder, is set to formally sign a deal early next month to buy a controlling stake in Daewoo Shipbuilding from state-run Korea Development Bank. KDB is DSME’s main creditor, with a 55.7 percent stake in the company.

According to the data compiled by ship evaluator VesselsValue, the order book for LNG ships by DSME is estimated at US$6.85 billion, with the corresponding figure for HHI being US$6.01 billion.

Samsung Heavy Industries came in third with outstanding order book of US$4.69 billion, the data showed.

“The HHI group is already the dominant shipyard in terms of value on order, but the addition of the DSME orders would further cement their position as the world‘s leading builder. A combined Samsung remains a significant competitor in the LNG new-build segment though, attracting orders from three of the largest buyers of new-build tonnage,” it said.

“Natural gas will become an increasingly important part of the global energy mix for decades to come and maintaining a market leading position in the construction of these vessels will be important for the world’s largest yards,” it added.

The ship evaluator said the consolidation of yards will help improve pricing power overall and should reduce loss-making projects that the yards undertook in the past five years or so.

By Ram Garikipati and newswires (ram@heraldcorp)