LNG-carriers order for Kogas open for foreign shipbuilders

Apr 17, 1997 02:00 AM

South Korea may open the bidding for the next stage of development of its LNG carrier fleet to foreign shipbuilders. State-controlled Korea Gas Corporation (Kogas) is looking to a relaxation of the policy which has hitherto made national LNG tanker projects the exclusive province of domestic yards. It plans to allow overseas yards to participate in a tender for possibly 6 or 7 newbuildings of 130,000 cm capacity required to enter service from the year 2000 onwards.
The move reflects the gathering pace of deregulation in South Korea, a recent entrant to the Organisation for Economic Co-operation and Development (OECD).
Kogas underwrote orders last August for 6 gas tankers of around 130,000 cm to paired shipowner/shipbuilder bidding groups. Four Korean yards were entrusted with the newbuildings, to be owned and operated by Hyundai Merchant Marine (HMMC), Yukong Line, Hanjin Shipping and Korea Line Corporation under long-term cargo guarantees from Kogas. The projects involving HMMC and HanjinShipping yielded business for the associated shipbuilding organisation Hyundai Heavy Industries and Hanjin Heavy Industries, respectively. The other successful yards were Samsung Heavy Industries, marking its breakthrough into the LNG-carrier field, and Daewoo Heavy Industries.
It is understood that, while foreign yards could be brought into the frame for the next tranche of cryogenic tankers, only domestic shipping companies will be invited to run the ships. Thus, given the vested interests of the large South Korean business groups, or chaebol, the extent to which overseas construction may or may not be entertained will be intertwined with which companies are selected to provide the chartered capacity to Kogas.
The immediate focus is on the six or seven ships for which tenders will be sought by the end of April, orders placed probably by mid-year. But Kogas is considering backing contracts for up to 11 newbuildings in 1997, raising the prospect of a further round of investment later in the year.

Source: not available
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