LNG Means Big Business for Samsung

Friday, October 24th, 2014
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South Korean conglomerate Samsung is making a bold foray into the liquefied natural gas (LNG) plant market in North America with the design of a key export facility in Texas.

Samsung Engineering, South Korea’s largest engineering firm, is expected to soon nab a deal worth potentially more than $1 billion for the design and construction of a gas export terminal in Brownsville. The project with Texas LNG LLC will mark the company’s first major deal in the LNG plant sector.

The start of the project will involve a $5 million contract due later this month for the provision of basic front-ending engineering design (FEED) services.

Engineering, procurement and construction (EPC) work on the project is set to commence in the second half of 2016, with construction slated for completion in 2019 and total costs expected to be in excess of $1 billion.

Following completion, the Brownsville terminal will be capable of processing as many as 2 million tons of LNG per year derived from the US natural gas system.

According to Samsung Engineering spokesperson Edward Kang, the the company hopes the project will provide it with an initial point of entry into the flourishing LNG sector.

“This project will enable us to crack into a market that had only few players,” said Kang.”This is a high-end market we have we have been trying to get into for a very long time.”

Samsung insiders said the contract would finally enable the company to have a crack at the LNG plant market, which has long been dominated by leading industrialised countries.

In order to facilitate Samsung’s expansion into the LNG market and lift its competitiveness within the industry, Samsung Engineering will also merge with Samsung Heavy Industries by the end of the year.

Samsung Heavy chief financial officer Chun Tae Heung said the merger is intended to combine Samsung Engineering’s project management expertise with Samsung Heavy’s offshore experience in order to grab more orders for LNG ships and energy projects.

Samsung Heavy Industries is currently hard at work on the Prelude FLNG for Royal Dutch, the world’s first floating liquefied natural gas platform as well as the largest offshore facility ever built.

Early in October Samsung Heavy Industries also won an order worth US$620 million from an undisclosed buyer in Asia for the construction of three LNG carriers.

The vessels will have a capacity of 174,000 cubic metres of LNG and will be used for the transportation of US shale gas to countries in Asia following delivery in 2018.

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