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Samsung Heavy Industries hit by $4.6bn FLNG cancellation from Shell

Embattled South Korean shipbuilder Samsung Heavy Industries (SHI) has been hit by a $4.62bn cancellation from Shell for three FLNG newbuildings.

In a statement to the Korean Stock Exchange SHI said that Shell Gas & Power Developments had cancelled three FLNG units contracted with the yard between 30 June 2015 and 30 November 2023.

The contracts were valued at KRW5.72trn ($4.62bn) and were terminated after failure to receive notification to proceed.

SHI is building the FLNG Prelude for Shell, the largest vessel ever constructed, costing an estimated $10.8bn - $12.6bn.

With the slump in the shipbuilding market post the global economic crisis SHI had set its sights on offshore accounting for 70% of orderbook in the long term.

In terms of new order value terms in 2015 SHI slipped out of the top three shipbuilders worldwide to be replaced by Imabari according to Clarksons Research Services.

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