Chevron to Equip LNG Carriers with Reliquefaction Technology

HD Hyundai Marine Solution, a subsidiary of South Korea's Hyundai Heavy Industries, has clinched a significant contract with Chevron, a leading energy corporation based in the United States. The contract entails the installation of reliquefaction units and various other technological enhancements on two liquefied natural gas (LNG) carriers owned by Chevron.

In an official statement released on Thursday, HD Hyundai Marine Solution, formerly known as Hyundai Global Service, disclosed the contract award, highlighting the scope of work to be undertaken. Alongside the installation of reliquefaction units, HD Hyundai Marine will also be responsible for incorporating air lubrication technology and implementing new gas compressors into the designated LNG carriers.

One of the LNG carriers slated to undergo the upgrade is the Asia Energy, a vessel with a capacity of 160,000 cubic meters that was constructed in 2014. This retrofitting initiative underscores Chevron's commitment to enhancing the efficiency and environmental performance of its LNG carrier fleet. Notably, this is not the first collaboration between HD Hyundai Marine and a major LNG carrier operator, as evidenced by their previous partnership with CoolCo, which resulted in the retrofitting of five TFDE LNG carriers with sub-coolers for LNG boil-off reliquefaction. This recent contract with Chevron is valued at $50 million, translating to approximately $10 million per vessel.

Reliquefaction units play a pivotal role in liquefied natural gas operations by reliquefying boil-off gas (BOG) generated during the cargo tank's operation. This process involves either returning the gas to the cargo tank or preventing its natural evaporation through the use of sub-cooled LNG. HD Hyundai Marine's extensive experience and expertise in this domain have positioned it as a preferred provider for such critical installations. To date, the company has secured orders totaling $100 million for the installation of reliquefaction units on eight LNG carriers, including the aforementioned contract with CoolCo. However, there remains a significant market opportunity, with approximately 100 LNG carriers currently lacking reliquefaction systems. The estimated cost to equip these vessels with the necessary technology is pegged at $700 million, indicative of the substantial demand for reliquefaction solutions within the LNG shipping industry.

Chevron, through its shipping unit, has been actively pursuing initiatives to reduce emissions and enhance operational efficiency across its LNG carrier fleet. Last year, the company's shipping unit engaged a subsidiary of Singapore's Sembcorp Marine to install reliquefaction systems and other advanced technologies on Chevron's LNG carriers, further underscoring its commitment to sustainable shipping practices. According to Chevron's official website, its shipping unit oversees a fleet of ten LNG carriers, including the Asia Energy.

Chevron Shipping's shipbuilding program has been characterized by a steady influx of new LNG carriers, with six vessels added to its fleet between 2013 and 2017. These strategic acquisitions reflect Chevron's proactive approach to fleet modernization and expansion, ensuring the company remains at the forefront of the global LNG shipping industry.