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Samsung bags $50bn Shell contract

Samsung bags $50bn Shell contract

Seoul: Samsung has won a mammoth contract with Shell to build LNG floating, production, storage and offtake vessels that could be worth $50bn over 15 years.
The Korean shipbuilder won the tender in fierce competition with compatriots Daewoo and Hyundai and their consortium partners.

Initially the contract is for one LNG-fpso at around $5n, but up to ten such vessels, some reports suggest more, could be built under the commitment.

Shell is planning a 3.5m tonnes a year development of its Prelude field off Western Australia but has numerous other offshore LNG production possibilities in its extensive portfolio. Samsung's shares jumped 5% on the Korean Stock Exchange at the news.
Meanwhile the shipbuilder saw net income drop 10% to Won150.8bn ($96m) in the second quarter as a result, said the company, of higher borrowing costs. Operating profits actually rose 19% to a record Won228.8bn while sales were up 25% to Won3.23trn ($2.14bn), another high.

Hyundai Mipo also saw increased sales in the quarter but net earnings almost halved year-on-year to Won79.4bn ($64m). The builder blamed the high price of steel plate for its fall in net results.

That problem for Korea's builders will be alleviated in the second half by drastic cuts in steel plate prices by the major Korean steel producers after the slump in wolrdwide demand.  [30/07/09]