SHI Receives Orders for LNG Ships and Sea Platforms From India

Source: 3/2/2006, Location: Asia

Samsung Heavy Industries (SHI) has received orders to build one 15,500 §© LNG ship from Indias state owned firm Petronet, and one sea gas platform from ONGG at US$500 million. This order allows SHI to maintain number one share and outstanding orders received in the world LNG ship market for the third straight year, thus further strengthening its status as the top LNG ship manufacturer in the world. This LNG ship is 285 meters long and 44 meters wide, and will be delivered to Petronet on September 2009, which will run from Qatar to Dahej Port in India for more than 35 times a year carrying LNG.

India has is now one of the biggest importers of LNG. LNG accounts for 8% of Indias total energy supply, which the country plans to raise to up to 20% by 2025. On a longer perspective, it plans to increase its LNG ships from the current 2 to 34 ships. Traditionally, LNG ships have used steam turbine to generate power. This had emerged in early 1970s and a total of 200 orders have been made so far globally. These steam turbine powered ships are low&min;priced but its energy efficiency is quite low. But the LNG ship order given to SHI is fuel efficient while it is an electricity&min;powered, and has the same running speed as steam turbine powered ships.

SHI had developed electricity powered LNG ships in 2001 for the first time in the world to prepare for surging oil prices. It has since become the worlds leading LNG ship manufacturer, by receiving a total of 12 electricity powered LNG ship orders out of a total of electricity&min;powered LNG ship orders made in the world. Electricity powered LNG ships are safer than the steam turbine powered LNG ships. They are also environmentally friendly as it can reduce carbon oxide, and can save more than US$50 million fuel costs assuming that the life expectancy of a ship is 25 years. Orders for these ships are increasing at a sharp pace recently.

The sea gas platform is a marine facility that carries around 12,000 barrels of oil and 2 million cbm natural gas produced at sea oil fields through a 80 kilometer long pipeline to a land storage facility. It will be installed in the Vasai sea oil field located in the northeast area of Mumbai India to run for 25 years.

During the past decade, crude oil consumption has increased by 5.6% on annual average in India, whereas production growth remained at only 0.7%. Due to this, India imports more than 60% of crude oil despite the huge crude oil reserves amounting to 16 billion barrels. India now actively develops energy resources led by ONGC. Moreover, sea facilities and ship orders are likely to increase in the future given the potential demand for new ships to replace old ones that have been running for more than 20 years.

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