Samsung Heavy Industries Announces Agreement for Two Ammonia Carriers

Samsung Heavy Industries (SHI), a prominent South Korean shipbuilding company, has secured a substantial contract worth approximately $240 million for the construction of two very large ammonia and liquefied petroleum gas (LPG) carriers. The agreement, with an undisclosed Oceania-based shipping company, outlines the completion and delivery of these specialized carriers by June 2027, as announced in a regulatory filing by SHI. This contract adds to SHI's impressive total orders for the year, reaching $6.8 billion and positioning the company well on its path to achieving its annual order target of $9.5 billion.

The agreement with the Oceania-based client solidifies SHI's commitment to constructing cutting-edge vessels to meet specific industry demands. While the client's identity remains confidential, the contract specifies the production of very large ammonia and LPG carriers, contributing to the growing trend of specialized vessels designed for the transport of alternative fuels.

This recent contract underscores SHI's consistent success in securing orders, bringing its total for the year to $6.8 billion. With an annual order target of $9.5 billion, the company demonstrates significant progress toward its objectives. Notably, SHI maintains a robust three-year order backlog valued at $31.9 billion, according to reports from Yonhap. This backlog reflects the company's ability to secure future projects, providing stability and visibility into its operations.

South Korean shipbuilders, including SHI, have observed a surge in orders for ammonia carriers, aligning with the increasing interest in ammonia as a cleaner and versatile energy carrier. The industry has witnessed several milestone contracts, including HD KSOE's agreement for four very large ammonia carriers (VLACs) and Hanwha Ocean securing a significant order for four VLACs, both highlighting the rising demand for vessels capable of transporting large quantities of ammonia.

Recent contracts have showcased innovations in vessel design, emphasizing increased ammonia loading capacity in cargo tanks. Notably, the VLACs ordered by HD KSOE can carry ammonia up to 98% of cargo tank capacity, distinguishing them from conventional gas carriers. Similarly, Hanwha Ocean's VLACs, set to be the largest of their kind globally, boast a capacity of 93,000 cubic meters per vessel.

The uptick in demand for ammonia carriers aligns with the broader global trend of transitioning towards cleaner energy sources. As countries and industries focus on reducing carbon emissions, ammonia emerges as a promising alternative fuel. Its clean and versatile characteristics position it as a key player in sustainable energy solutions. The construction of specialized carriers, like those contracted by SHI, becomes crucial in facilitating the safe and efficient transport of ammonia, contributing to the global push for cleaner and more environmentally friendly energy practices.