World’s top two shipbuilders in deal to merge: Seoul

Year after year, the top three shipbuilders churned out enormous cargo ships, oil tankers and offshore drilling rigs for shipping firms and energy giants around the world. (File/AFP)
Updated 31 January 2019
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World’s top two shipbuilders in deal to merge: Seoul

  • The world’s top three shipbuilders are South Korean, but the industry has been hammered in recent years
  • South Korea’s “Big Three” shipbuilders were once hailed as a major driver of the country’s export-reliant economy

SEOUL: The world’s biggest shipbuilder, South Korea’s Hyundai Heavy Industries, has reached a deal to acquire a majority stake in ailing number two Daewoo from the government, Seoul said Thursday.
The world’s top three shipbuilders are South Korean — Samsung Heavy ranks third — but the industry has been hammered in recent years by overcapacity and plunging ship prices.
Daewoo Shipbuilding & Marine Engineering has struggled in particular and has repeatedly been bailed out by the government to avoid collapse, at a total cost of several billion dollars.
Hyundai Heavy itself announced net losses of 633 billion won ($569 million) for 2018 on Thursday, blaming higher steel costs and lower demand.
But the state-funded Korea Development Bank (KDB), which owns 55.7 percent of Daewoo, said Hyundai had agreed to take over its stake.
Rather than paying cash, the shipbuilder will split itself in two and issue KDB shares in a new holding company that will own Daewoo and most of Hyundai Heavy’s existing businesses.
The deal would further consolidate Hyundai Heavy’s position as the world’s largest shipbuilder, giving it more than 20 percent of the global market.
It will go through unless Samsung Heavy makes a better offer, KDB officials said, with a final decision expected in March.
South Korea’s “Big Three” shipbuilders were once hailed as a major driver of the country’s export-reliant economy — the world’s 11th largest.
Year after year, they churned out enormous cargo ships, oil tankers and offshore drilling rigs for shipping firms and energy giants around the world.
But a prolonged slump in oil prices and the global economic slowdown sapped demand for tankers and container ships, while overcapacity, regional rivalry and competition from cheaper Chinese shipbuilders squeezed profit margins.
Hyundai Heavy’s 2018 losses represented a significantly worse performance than the previous year, when it was 93.4 billion won in the red.
The shipbuilder said its acquisition of Daewoo was aimed at “boosting the competitive edge of South Korea’s shipbuilding industry by maximizing the synergy effect.”


Bahrain LNG terminal to start commercial operations in May

Updated 41 min 49 sec ago
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Bahrain LNG terminal to start commercial operations in May

  • Bahrain LNG is the developer of the receiving and regasification terminal within the Khalifa bin Salman Port facility in Hidd

DUBAI: Bahrain’s liquefied natural gas (LNG) terminal will start commercial operations in May, with the first LNG shipment to be imported mostly from the UAE’s ADNOC, state media quoted the CEO of Bahrain’s National Oil and Gas Authority (NOGA) as saying.
Bahrain LNG is the developer of the receiving and regasification terminal within the Khalifa bin Salman Port facility in Hidd, Bahrain, Bahrain LNG’s website says.
The terminal also houses an offshore LNG receiving jetty and breakwater, a regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility, and an onshore nitrogen production facility, according to the website.
Bahrain’s first LNG floating storage unit is anchored in the United Arab Emirates’ Fujairah port, Refinitiv Eikon data shows.
The storage unit is expected to arrive at the Hidd terminal in May, Bahrain News Agency quoted NOGA chief executive Jassem al Shirawi as saying on Monday.
The report did not specify the overall shipment amount, a small part of which Chevron will deliver later.
The terminal is more than 98 percent ready and the trial period will last only a few weeks, he told the news agency.
“Bahrain has signed agreements with more than 25 companies and gas-producing countries from around the world to import LNG,” al Shirawi was quoted as saying.
The LNG import terminal, with a capacity of 800 million cubic feet per day, will allow Bahrain to import the super-chilled fuel as demand grows for natural gas to feed large industrial projects, generate power and produce oil.