One of South Korea’s leading shipbuilders, Samsung Heavy Industries (SHI), is poised to secure a major contract for a liquefied natural gas (LNG) project in Mozambique, which hosts one of Africas largest gas reserves.
As of Dec. 18, industry sources revealed that SHI is currently engaged in production design for a second floating liquefied natural gas (FLNG) facility of the Coral Sul FLNG project. FLNG facilities are floating structures used to produce, store, and offload LNG at sea. The upcoming contract, valued at approximately $2.5 billion (3.6 trillion won), is expected to bolster SHI’s annual order book beyond its $9.7 billion target if finalized before the year’s end. Notably, SHI has already delivered five of the seven FLNG units commissioned globally, cementing its leadership in the sector.
Mozambique has been actively developing LNG projects since a massive gas field was discovered off Cabo Delgado Province in 2010. Deloitte estimates from earlier this year suggest that Mozambique’s natural gas reserves could generate up to $100 billion (143 trillion won) in revenue.
The initial Coral South FLNG project, awarded to SHI in 2017 as part of a consortium with France’s TechnipFMC and Japan’s JGC, was a landmark development. Deployed at Area 4, the unit boasts an annual production capacity of 3.4 million tons of LNG. In 2021, Mozambique’s president attended the naming ceremony at SH’s Geoje shipyard, celebrating the first FLNG unit, which began production the following year.
The second Coral Sul FLNG unit, also known as Coral North or Coral Norte, is being pursued by SHI to further develop Area 4’s offshore gas resources. An SHI
representative stated, “The basic design of the second FLNG project mirrors that of the first unit, and we are now advancing production designs. With the year coming to a close, we are optimistic about finalizing the contract soon.”
A separate LNG project in Mozambique involves LNG carriers for Area 1. In 2020, SHI secured a contract with TotalEnergies, a French multinational energy company, to construct eight LNG carriers, while HD Hyundai Samho Shipyard won an order for six. However, the project was indefinitely halted in 2021 due to security concerns stemming from militant attacks. Recently, TotalEnergies and its partner, Japan’s Mitsui & Co., have signaled plans to revive the project.
On Dec. 5, Kenichi Hori, president of Mitsui & Co., stated, “We are in the final stages of coordination with TotalEnergies and the Mozambican government to restart construction of the LNG project.” A key hurdle remains securing the required financing. In October, TotalEnergies Chairman and CEO Patrick Pouyanné
reaffirmed the company’s commitment, noting that 70 to 80% of the $14 billion financing target had been reconfirmed.
If the project resumes, SHI and HD Hyundai Samho are expected to renegotiate contracts for LNG carrier construction. The shipbuilding industry anticipates that the contracts will be awarded at significantly higher prices than four years ago, when the combined value of the two companies’ deals was approximately $2.2 billion (3 trillion won).
With global newbuilding prices reaching record highs, both shipbuilders stand to benefit. Once TotalEnergies concludes its negotiations with the Mozambican government, Samsung Heavy Industries is likely to move forward with finalizing terms for LNG carrier production.
The Chosun