HD Hyundai Heavy, Samsung Heavy vie for Australia's largest undeveloped offshore gas field

HD Hyundai Heavy Industries and Samsung Heavy Industries have both entered the bidding race for offshore plant contracts tied to Australia's largest undeveloped offshore gas field project.

Three consortia submitted technical proposals last month for two large floating production, storage and offloading units — known as FPSOs — tendered by Australian energy company Woodside for its Browse project, according to industry sources Tuesday. HD Hyundai Heavy Industries and Samsung Heavy Industries are each participating in two of those consortia.

The Browse project aims to develop Australia's largest untapped offshore gas field. The core plan involves extracting gas from the seabed via FPSOs and piping it to onshore facilities to produce LNG. If developed, annual LNG output is expected to reach 11.4 million tons. Total investment is estimated at $35.2 billion, with each FPSO contract estimated to be worth billions of dollars.

The project has been in the works since the 2010s but was derailed by a series of domestic and international setbacks, including environmental regulations. To move the project forward, Woodside has proposed injecting carbon dioxide generated during gas field development into underground storage reservoirs. "The pace of the FPSO bidding process is faster than before, and expectations among project participants are growing," an industry official said.

HD Hyundai Heavy Industries is bidding alongside US engineering firm KBR and Dutch FPSO specialist SBM Offshore. Samsung Heavy Industries has formed a consortium with Norwegian offshore engineering firm Aker Solutions and Norwegian FPSO systems company APL. Both consortia are expected to submit commercial bids before the end of this month.

Both companies are expected to highlight not only their price competitiveness but also the experience they have built across a range of offshore plant projects.

HD Hyundai Heavy Industries signed a contract in 2024 with a Middle Eastern customer to supply a single topside structure for a gas field offshore platform, a deal worth 1.54 trillion won ($1.15 billion). In 2023, it won an order from Woodside for the Trion floating production unit, and in 2021 it signed an engineering, procurement, construction, installation and commissioning contract with POSCO International for a 500 billion won gas compression platform to be deployed at a Myanmar gas field.

Samsung Heavy Industries secured an order in June for the Delfin FLNG, the first floating LNG production facility ever built for use in the United States, valued at $2.9 billion. In 2022, the company signed a deal worth $1.5 billion with an Asian shipowner for a single offshore production facility, and in 2019 it won an order for the Ruby FPSO from India's Reliance Industries.

Meanwhile, Hanwha Ocean has entered the bidding for an FPSO contract tied to French energy major TotalEnergies' Venus oil field development project in Namibia, competing against SBM Offshore. Hanwha Ocean has been stepping up its push to strengthen its offshore plant competitiveness — last month it received approval in principle from Norwegian classification society DNV for a low-carbon standard FPSO design framework.

The volume of offshore plant project orders likely to attract Korean shipbuilders is expected to grow, driven by elevated global oil prices in the wake of the Middle East war. Argentina and other countries are reportedly in discussions about gas field development projects involving FLNGs.