Fabio Scala africa, development, Economy, Energy, FDI, Finance, Mozambique, Natural Resources

Samsung Heavy Industries to Win $2,5B Mozambique Coral FLNG Project

Samsung Heavy Industries (SHI) is close to landing a US$2.5 billion order to build a floating LNG (FLNG) vessel abroad for Italian energy company ENI.

South Korea-based shipbuilder Samsung Heavy Industries (SHI) is close to landing a US$2.5 billion (2.94 trillion won) order to build a floating LNG (FLNG) vessel abroad for Italian energy company ENI. SHI has had the greatest expectation for the project this year.

According to shipbuilding industry sources on November 21, Italy’s state-run energy firm ENI held a board meeting on the 18th (local time) and approved an investment plan for the Coral FLNG project in Mozambique.

SHI has formed a consortium with France-based Technip and Japan-based JGC to lead the project. There have been much concerns that SHI will be able to sign a formal contract for the project due to the prolonged low oil prices, though the consortium has been selected as a preferred bidder.

However, ENI signed an agreement with British oil company BP to sell the entire volume of LNG produced by the Coral project for a period of over twenty years last month, and the board of ENI approved the investment plan for the project this month. Accordingly, SHI has got the green light for the conclusion of the deal by the end of this year.

As the ENI, which owns a 70 percent stake in the Coral project, has authorized the investment plan, other concessionaires, which own a 10 percent stake each such as Korea Gas Corp., Portugal’s Galp Energia and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), are also expected to hold the board meeting to approve the investment plan for the project.

SHI set this year’s order target at US$5.3 billion (6.24 trillion won) earlier but it has so far received orders worth as low as US$800 million (941.2 billion won). Once the company wins the Coral project the total amount of orders awarded will jump to US$3.3 billion (US$3.88 trillion won). In addition, it will be meaningful for SHI to obtain the Coral project as the company is on the verge of losing the Gail LNG tanker project.

An official from SHI said, “We haven’t concluded the contract yet but we believe that it will be signed by the end of this year.”

Source: Business Korea