HD Korea Shipbuilding nabs $463 mn order for four VLACs

HD Korea Shipbuilding & Offshore Engineering Co.’s very large ammonia carrier. [Courtesy of HD Hyundai]

South Korean shipyard HD Korea Shipbuilding & Offshore Engineering Co., the intermediate holding company for HD Hyundai Group’s shipbuilding operations, has secured orders for four very large ammonia carriers (VLACs) totaling 616.8 billion won ($463 million).

The company announced on Thursday that contracts were signed with Singapore EPS and Greece Capital for the construction of four 88,000 cubic meter ammonia carriers (VLACs) at Gastech 2023, which was recently held in Singapore.

These vessels will be built at HD Hyundai Heavy Industries’ dockyard in Ulsan, South Korea, and will be sequentially delivered to the two shipowners by the second half of 2027. The contracts include purchasing options for an additional two vessels, which could lead to further orders moving forward.

According to Clarkson Research, a U.K.-based shipbuilding and maritime analysis institute, HD Korea Shipbuilding & Offshore Engineering has secured contracts for 19 out of the 27 large liquefied petroleum gas (LPG) and ammonia carriers ordered worldwide this year.

Notably, the vessels in the latest order will have a bigger ammonia cargo capacity compared to existing large gas carriers, or a tank capacity of 86 percent to 98 percent. This makes them the largest ammonia carriers in the world, surpassing existing very large gas carriers and is also a world first for the Old Panamax class of vessels.

While these ships will initially be built as LPG dual-fuel propulsion vessels, there are plans to consider converting them to ammonia propulsion in the future once ammonia-driven engines are developed. If the specifications are modified as planned, the vessels will become the world’s first ammonia-powered carriers.

HD Hyundai Heavy Industries is currently collaborating with key engine technology companies such as MAN ES and WinGD to develop large ammonia engines, with a target of completing the development by 2024.

In addition to these contracts, HD Hyundai Heavy Industries Co., a subsidiary of HD Korea Shipbuilding & Offshore Engineering, signed a memorandum of understanding (MOU) on Thursday with EPS, American Bureau of Shipping (ABS), MAN ES, and the Maritime and Port Authority of Singapore (MPA) to jointly explore the development of dual-fuel propulsion ammonia carriers.