Samsung Heavy Industries (010140.KS) has officially confirmed that it won a contract to build the first floating liquefied natural gas (FLNG) production facility in U.S. history.
Samsung Heavy said Friday that the FLNG order it disclosed on Tuesday is a contract to build the first unit of the Delfin LNG Project in Louisiana. The Delfin FLNG order is a large-scale project worth $2.9 billion (approximately 4.3301 trillion won).
"This project demonstrates the potential for full-scale expansion of FLNG in the North American LNG development market going forward," a Samsung Heavy official said. "It is significant as a starting signal that will accelerate the era of FLNG mass production."
The Delfin LNG Project breaks the traditional formula that relied on building massive onshore LNG plants and instead adopts a multiple-deployment approach using several FLNG vessels of identical specifications, with three units planned for order. This approach is regarded as a model that fundamentally transforms the LNG production paradigm by diversifying initial investment risks and maximizing production flexibility in response to market changes, securing differentiated competitiveness compared with onshore LNG projects.
The Delfin LNG Project is also the first case in which a purely private developer and a shipbuilder serving as the EPC contractor collaborated to develop an FLNG, rather than being led by oil majors or state-owned enterprises. This is why the base of orderers in the global FLNG market is expected to broaden going forward.
The Delfin FLNG has been designed as a "hybrid FLNG" that combines the economic advantages of nearshore FLNG with the stability required for offshore environments. The topside plant has been lightened with a slim, nearshore-style design that receives pretreated gas from onshore facilities, lowering construction costs. It is also equipped with a large 120-person living quarters and a mooring system to enable smooth and safe operation in an offshore environment 75 kilometers off the Louisiana coast.
"The Delfin project is significant in that Samsung Heavy will independently carry out the entire engineering, procurement and construction (EPC) process for the first time and lead the series construction," a Samsung Heavy official said. "By applying the optimized design and solutions that Samsung Heavy proactively proposed to secure economic viability, we will drive the era of FLNG mass production with groundbreaking cost reductions and flawless quality."
Starting with Royal Dutch Shell's Prelude, the world's largest FLNG, Samsung Heavy has won seven of the 11 newbuild FLNG orders to date, commanding a 64% global market share. Negotiations for follow-up Delfin FLNG construction are also currently underway.
