Korean shipbuilding & Maritime Offshore

June 2013

Doo Seok KIM Senior Market Advisor

Innovation Norway Seoul

Bjørn O. Bjørnsen Director Innovation Norway Seoul

Have you ever heard of this country?

Chong-Gye stream, downtown Seoul (1950s) Chong-Gye stream, downtown Seoul (2000s)

From a hopeless country -Japanese colony 1910~1945 -Korean War 1950~1953 -Extreme poverty (GDP per capita USD60 in 1960s)

To a modern industrial state - Achieve democratization & industrialization - Surpass USD 20,000 GDP per capita in 2000s - Modernized manufacturing state and knowledge society based on ICT

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Korea and Norway

3 Source: Wikipedia

Norway Korea Capital Oslo Seoul Languages Norwegian Korean

Government Unitary Parliamentary Constitutional Monarchy

Unitary Presidential Constitutional Republic

Area 385,252 km2 100,210km2 Polulation 5,009,150 48,875,000 (24th) GDP (nominal) total USD 483.650 billion USD 1.163 trillion (15th) GDP per capita USD 97,254 USD 23,749 HDI 0.943 (1st) 0.897 (15th)

UK

USA

Japan

Korea China

19C: Ship material (Wood steel)

1950s: Shipbuilding method (rivet Block & welding)

2000s: Flexible ship design capability

2010~: Cheaper labor cost and increased shipbuilding capacity through government’s promotional policy

History…

North East Asia covers about 85% of global shipbuilding.

on Global Shipbuilding

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Large LNG

Large Containership

Large BC

VLCC

Small LPG

Large LPG

Small BC

Small Containership

Small Vessel Large Vessel

Low Complexity

High Complexity

Review on NEA shipbuilding

Drillship

Conventional LNG

ULCC

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Tanker, containers

Korean shipbuilding development

Foundation 1960S

Growth

1970~1980 By a government economic development program Take-off

1990S Accumulated the advanced technologies

Global Leading

2000S Profitable growth & global shipbuilding networking Diversification

2010~ Extreme ocean plants and renewable energy business

1 High Value Added Ships 2 Green Ship Technology 3 Maritime Offshore Biz

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& Future Strategy

• Motivation: Conventional shipbuilding turned to Red Ocean

• Types: LNG carriers, large containerships, sophisticated product & chemical tankers

• With adding new green ship technologies with international partners

• Strong edge on ultra large containership (>10,000TEU) & large LNGC (>200K CBM)

• Aim to secure total 40 new LNG ship orders in 2013

• Entered into whole LNG value chain

High value added shipbuilding

LNG RV

LLNGC

LNG FPSO

LNG FSRU

Production Facility

Liquefaction Facility LNGC Storage &

Regasification Gas

Field End User

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• Offshore plants engineering & construction as an EPC contractor

• Main types: Fixed platforms, FPSOs, semi-submersible rigs and drillships

• Sharply increased Norwegian projects and opportunity for Norwegian suppliers

• Shipbuilders tilt toward offshore plants (80% of new order amount in 2013)

Maritime Offshore

[USD trillion] [Biz plan analysis – Order Target]

9,6 13

10

14,3 13

10,4

19,5

29,7

5

10

15

20

25

30

35

0

Order status 2012

Order plan 2013

Order plan from O.D.2013

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Norwegian offshore projects (From 2012 ~early of 2013)

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Project Type Unit

Quad 204 Semi-Sub. Drilling Rig 1

CAT D Semi-Sub. Drilling Rig 2

n/a Semi-Sub. Drilling Rig 1

n/a Ultra-DW Drillship 1+1

n/a Ultra-DW Drillship 1+4

Martin Linge Fixed Platform (Topside) 1

Aasta Hansteen Spar Platform (Hull + Topside) 1

Gina Krog (former Dagny)

Fixed Platform (Topside) 1

LNG FSRU 1

Mariner Fixed Platform (Topside) 1

Heidrun Floating Storage Unit (FSU) 1+2

Odfjell Drilling DSME

Songa Offshore DSME

Fred Olsen E. HHI

Seadrill SHI

Sigma Drilling STX

Total E&P Norge SHI/Technip

Statoil HHI/Technip

Statoil

DSME

Hoegh HHI

Statoil DSME

Statoil SHI

Aker Solutions ˻ Drilling Equip. Package 2

˻ CS 60 E Semi-Sub. Design 1 Moss Maritime

˻ Offshore Cranes 1 TTS

˻ D. engineering & hook-up 1 Aker Solutions

˻ Living Quarter Apply Leirvik 1

Collaboration on green ship technologies

Opportunities

Norwegian offshore projects

• Qualified NORSOK suppliers • Design package: Rig & OSV • Engineering collaboration: FEED and

detailed topside engineering • Topside safety & risk assessment

service • Core offshore equipment • Hook-up and installation service • R&D collaboration on subsea

technology development

• Hull performance • Engine efficiency/fuel consumption • Co2 emission • Alternative propulsion system • BWTS • Energy saving or energy recycling

device • LNGC: CCS, Cryogenic material and core

equipment applicable for ARC-7 ice class

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Core offshore equipment

[Structure/hull outfitting] Mooring winch/windlass, Loading/offloading, Drilling package, Crane

[Accommodation] HVAC, AL. modular living quarter

[Machinery/process] Gas turbine generator, Gas compressor, Process pump, Produced Water Treatment Skid (Hydro Cyclone Type)

[Pipe & fitting] BWTS, Stainless Pipe (including Duplex), FRP Pipe & Fitting/Flange, Shut Down Value, Control Valve

[Electric] Generator, High Voltage Switch Gear, Variable Frequency Converter Drive, Battery & UPS, Solar System, Integrated Central Control System [Fire & safety] Life Boat, Life saving Appliance, Survival Suit, Fire Pump, Fire Detecting System, Gas Detecting System, EDS

Opportunities

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UK

USA

Japan

Korea China

Do you remember?

1 High Value Added Ships

2 Green Ship Technology

3 Active Maritime Offshore Biz

Korea Strategy for the future It will be interesting to see future market competition and which country will lead the global market. Also it will be very interesting to find Norwegian collaboration with Korean shipbuilders for the three strategic areas.

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How to succeed in your business in Korea

Key Points of Business Strategy….

Focus on Core Business Competence with Balanced Business Portfolios In-housed engineering capability

Safe First and World Best Quality

Flexible

Overcome cultural language barriers

Establish Long term Business Partnership

For Win-Win Relationship with Clients and Partners

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For more contact

Dooseok.kim@innovationnorway.no

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Doo Seok KIM Senior Market Advisor Innovation Norway Seoul

Bjørn O. Bjørnsen Director Innovation Norway Seoul Bjorn.Bjornsen@innovationnorway.no