Hanwha Ocean reels in 2nd MRO contract with U.S. Navy

Hanwha Ocean, the shipbuilding arm of Hanwha Group, secured a maintenance, repair and overhaul contract with the U.S. Navy for its USNS Yukon oiler.

The Military Sealift Command's USNS Yukon oiler, for which Hanwha Ocean secured deal for maintenance, repair and overhaul, is to be delivered to the U.S. Navy by April 2025. [HANWHA OCEAN]

Hanwha Ocean, the shipbuilding arm of Hanwha Group, has secured another contract for maintenance, repair and overhaul (MRO) for a U.S. Navy vessel, less than three months after its previous deal with the U.S. military.

The announcement on Tuesday comes on the heels of U.S. President-elect Donald Trump’s reported intent to strengthen the ties between the United States and Korea’s shipbuilding industry as part of efforts to counter potential naval threats from China.

The vessel in need of repair is the USNS Yukon, a replenishment oiler deployed with the U.S. 7th fleet. The ship, which entered service in March 1994, has a displacement of 31,000 tons with a length of 206 meters (676 feet) and a beam of 29.6 meters.

Hanwha Ocean plans to conduct maintenance and repairs on the vessel, which will be delivered back to the Navy in April 2025. The previous MRO contract concerning a U.S. naval logistics support ship, the Wally Schirra, was announced on Aug. 28 and marked the first service contract won by a Korean shipbuilder.

In October, Adm. Stephen Koehler, commander of the U.S. Navy Pacific Fleet, met with Hanwha Group Vice Chairman Kim Dong-kwan to tour Hanwha Ocean’s Geoje shipyard in South Gyeongsang and discuss further cooperation in future MRO projects.

"Hanwha Ocean is becoming a trusted partner in the U.S. Pacific Fleet operations,” said Kim Dae-sik, managing director at Hanwha Ocean, in a statement. “Leveraging our world-class MRO technology, we are committed to timely deliveries that will enhance U.S. naval power and contribute to the U.S.-Korea alliance."

The deal comes amid Trump’s focus on the maritime sector, which he emphasized to President Yoon Suk Yeol during their first phone call on Nov. 7 following his election victory, according to Seoul's presidential office.

Such cooperation would mark a thread of continuity with the Joe Biden administration. In May, the U.S. Department of Defense unveiled plans for a Regional Sustainment Framework to establish military maintenance hubs across five Indo-Pacific countries, including Korea and Japan.

Reports released over the year have warned of China’s growing military dominance in the region. China operates 234 warships, surpassing the 219 operated by the U.S. Navy, excluding logistics and support vessels, according to a June report from the U.S. think tank, the Center for Strategic and International Studies.

While the value of the two contracts has not been revealed, domestic shipbuilders, led by Hanwha Ocean and HD Hyundai Heavy Industries, are aiming to enter the U.S. MRO market, which accounts for $14.4 billion of the $57.76 billion global industry annually, according to the British military intelligence firm Janes.

The two shipbuilders each signed a Master Ship Repair Agreement with the U.S. Navy in July, rendering them eligible to bid on MRO projects for U.S. warships.

Hanwha Ocean also jointly acquired Philadelphia-based shipbuilder Philly Shipyard in June for $100 million with Hanwha Systems, the first time a domestic shipbuilder acquired a U.S. shipyard.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]