Page 44: of Maritime Reporter Magazine (August 2017)

Shipbuilding

The orders have swelled Korean yard orderbooks, with HHI’s up 150% since

Vladimir Putin’s 2016 visit to Seoul. “It will be an addition to current ship- building overcapacity and as such contribute to a pattern of continued short earnings cycles in shipping. As HHI is known to be an outstanding Tier I yard group — and quality never goes out of fashion — Tier II yards should fear this addition.”

Dag Kilen

Senior Shipping Analyst, Fearnley Consultants and HHI the VLCCs. Mr. Demirkol sees in a depressed offshore drilling market of jack-ups, it would be much cheaper to big builds and will sell 2-stroke and transfers of Korean crews to El Khair. looks set to kick-off by 2019, headed by to buy their own ? eet than to build it,” 4-stroke engines and pumps with on-site “It’s wiser,” he says. jack-up builder Lamprell. Mr. Smith says. Heikkinen forecasts manufacturing. “Very large and small

In Russia, Daewoo is overseeing much For Lamprell, working now from three 365 jack-ups under contract in 2020, or vessels” are to be served, Aramco says. of the work on yard facilities at the Zvez- smaller UAE yards, a JV at the biggest 20-percent more than today. “But it’s far “The new JV will also operate under a da shipbuilding complex in cooperation shipyard in the Middle East means “two below the current marketed supply of MAN-HHI sublicense for the manu- with Russian SCF, while a Zvezda- rigs a year” plus non-rig marine mainte- 461 rigs, not to mention the 98 jack-ups facturing and servicing of 2-stroke en-

Hyundai JV formed in 2017 will focus nance. Lamprell will invest $140 million under construction.” gines.” on the shipbuilding. The orders have to earn 20 percent of the shipyard JV. swelled Korean yard orderbooks, with Saudi Aramco will invest $350 million Key Knowhow Shipping Circles

HHI’s up 150 percent since Vladimir for 50.1 percent, and the Kingdom will McDermott will build the marine com- Bahri, the largest VLCC owner in the

Putin’s 2016 visit to Seoul. Though their inject $3.5 billion. plex that’ll be the JV’s heart and will world, will pay $139 million for 20 per- impact on markets for smaller vessels is Rowan Companies chief exec, Tom move to Khair from nearby Dubai for cent of the shipyard JV. VLCC builder, in doubt, the impact of Korean know- Burke — part of a separate Aramco a long-term land lease from where it’ll Hyandai, will front $70 million for 10 how in Saudi and Russia will be felt. “It JV— declared a “growing Saudi Arabi- provide training. percent. Mr. McDonald, now Lamprell’s will be an addition to current shipbuild- an offshore drilling market” was at hand, For “the next 50 years,” chief exec Da- outgoing chief exec, estimates Bahri will ing overcapacity and as such contribute and that “rig commitments” for Rowan vid Dickson sees McDermott expanding buy three-quarters of its oceangoing ves- to a pattern of continued short earnings jack-ups were now long-term. Rowan its offshore and subsea capacity at Al sels from the JV over 10 years, or no less cycles in shipping,” says Dag Kilen, se- will contribute three jack-ups to the rig Khair to serve subsea markets from East than 50 vessels, many of them VLCCs. nior shipping analyst at Fearnley Con- JV, Saudi Aramco two. Africa to the India. “The future fabrica- Some serious observers say the world sultants in Oslo. He says it piles pressure Heikkinen Energy Advisors offshore tion is expected to provide up to 16 mil- has enough shipyard capacity already. on yards everywhere. “As HHI is known analyst, David Smith, says the Saudi lion manhours of capacity, up from eight “The ample, available existing capac- to be an outstanding Tier I yard group — plan is “more about job creation” and not million manhours” at McDermott’s Jebel ity has, post the ? nancial crisis, created and quality never goes out of fashion — “Aramco’s view of global jack-up mar- Ali facilities. Mr. Dickson says he sup- short earnings cycles for shipping, as

Tier II yards should fear this addition,” ket fundamentals in ’20 and beyond.” ports the Saudis’ Vision 2030 and Saudi the supply side of the shipping market

Mr. Kilen says about El Khair. He points to jack-ups sold recently for Aramco’s In-Kingdom Total Value Add can respond quickly to any demand im- $65 million, or over 60 percent less program, or IKTVA, aimed at 51-percent provements,” says Mr. Kilen, a tanker

Saudi JVs than original price. “If Aramco were local content by 2021. expert. He says the overcapacity pattern

At Khair, the building of jack-up rigs only concerned about a future shortage Hyundai at Khair won’t be limited has recently been seen in most shipping segments. Dry cargo, for one, has made three “recovery attempts” since 2009, and the ? rst two, he says, were killed “by massive newbuild contracting and deliv- eries once demand improved.

“The results of the third ongoing at- tempt remain to be seen. LNG and LPG shipping both had their brief periods with strong earnings a couple of years ago, but here, too, the high contracting

A Mega Yard Order:

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