HD Korea Shipbuilding hits order target ahead of schedule

HD Korea Shipbuilding & Offshore Engineering's VLAC or very large ammonia carrier (HD Korea Shipbuilding & Offshore Engineering)

HD Korea Shipbuilding & Offshore Engineering said Thursday it secured new orders for four very large ammonia carriers, or VLACs, totaling 616.8 billion won ($462.6 million), reaching its annual order target ahead of schedule.

These orders, secured during the global gas and climate technologies event, Gastech 2023, with Singapore EPS and Greece Capital, increase the company's 2023 total orders to $15.94 billion, outpacing their annual target of $15.74 billion.

Ammonia carriers play a pivotal role in the massive transportation of ammonia, a crucial substance for sectors such as agriculture and refrigeration.

Unlike traditional VLACs that typically fill up to 86 percent of their tanks with ammonia, these newly ordered vessels can load up to 98 percent. This makes them the world's most capacious ammonia carriers in the Old Panamax class -- vessels designed to navigate the original Panama Canal, a major waterway facilitating global trade.

Set to be built at HD Hyundai Heavy Industries’ dockyard in Ulsan, these vessels are scheduled for delivery by the second half of 2027. The contracts also offer the option to purchase two additional ships, suggesting additional orders in the future.

Initially, the carriers will use liquefied petroleum gas dual-fuel propulsion engines. While LPG is a greener alternative to traditional marine fuels, the company aims to eventually transition to ammonia propulsion, as ammonia emits no carbon when combusted.

The shift to ammonia propulsion would mark a global first. HD Hyundai Heavy Industries is collaborating with large-bore engines and turbomachinery company MAN Energy Solutions, and gas and diesel company WinGD to create these new engines, with a 2024 completion target.

According to UK-based Clarkson Research, HD Korea Shipbuilding & Offshore Engineering secured 19 of the 27 major LPG and ammonia carrier orders worldwide this year.

By Moon Joon-hyun(mjh@heraldcorp.com)