Hanwha Ocean Lands $247M Deal for Two VLACs Amid Surging Ammonia Carrier Demand

Hanwha Ocean, previously known as Daewoo Shipbuilding & Marine Engineering (DSME), has marked its entry into 2024 by securing a significant order for the construction of two ultra-large ammonia carriers (ULACs). Valued at approximately $247 million, these vessels, commissioned by an undisclosed shipowner in the Oceania region, emphasize the growing demand for eco-friendly shipping solutions. This deal constitutes Hanwha Ocean's seventh order in the past two months, reflecting the industry's confidence in the company's advanced technologies.

The ordered ULACs, each with a capacity of 93,000 cubic meters for transporting ammonia, will feature Hanwha Ocean's eco-friendly innovations. Notably, the Hanwha SmartShip Solution & Service (HS4) smart ship platform and the shaft generator motor (SGM) are integral components of these carriers. The construction of these vessels is scheduled to take place at Hanwha Ocean's Geoje plant, with delivery slated for the second half of 2027.

A spokesperson from Hanwha Ocean attributes the consistent flow of orders for eco-friendly carriers to the market's confidence in the company's technological prowess. This underscores Hanwha Ocean's commitment to setting benchmarks in advanced eco-friendly shipbuilding technology through continuous technological advancements. The shipbuilder is actively engaged in the development of alternative fuels and eco-friendly technologies, with a focus on progressively reducing greenhouse gas emissions. The company is also dedicated to the commercialization of carbon-free ships, exploring propulsion options such as ammonia, direct hydrogen, and hydrogen fuel cells.

The surge in demand for Very Large Ammonia Carriers (VLACs) is not unique to Hanwha Ocean, as other South Korean shipbuilders are also experiencing increased interest. HD Korea Shipbuilding & Offshore Engineering (HD KSOE) recently announced securing an order for the construction of three VLACs for an undisclosed shipping company in Central and South America. HD KSOE has seen substantial orders, totaling nearly 30 ships since the beginning of the year. These include two very large ammonia carriers, 15 medium-sized PC ships, eight very large LPG carriers, and two LNG carriers.

Samsung Heavy Industries (SHI) also closed the previous year with a significant contract worth $240 million. The deal involved the construction of two very large ammonia and liquefied petroleum gas (LPG) carriers for a shipping company based in Oceania. Additionally, SHI recently secured a contract for two LPG/ammonia carriers with undisclosed shipowners in the Oceania region. These two VLACs are expected to be delivered by the end of November 2027.

There is speculation that the company behind these recent orders is TMS Cardiff Gas, led by George Economou. According to data from VesselsValue, TMS Cardiff Gas already has four eco-design VLACs on order at SHI, all set for delivery in 2027 with a capacity of 88,000 cubic meters each.