JE Ocean Heavy Industries Secures 10 Tanker Orders Ahead of Gunsan Shipyard Revival
Key Takeaways
- •On September 21, JE Ocean Heavy Industries agreed with an Oceania-based shipowner to build six tankers: two 157,000-ton crude oil carriers and four 114,000-ton carriers designed for crude oil and petrochemical products, with tonnages in the Suezmax and Aframax classes.
- •Including four 114,000-ton carriers covered by letters of intent signed in June, the company has now lined up 10 vessels to build before finalizing its takeover of the Gunsan Shipyard.
- •JE Ocean Heavy Industries was newly created by Eco Prime Marine Pacific, the largest shareholder of HJ Shipbuilding & Construction, and in June signed an asset transfer contract with HD Hyundai Heavy Industries for the yard.
- •The company plans to complete the acquisition by the end of the year and start shipbuilding early next year, once facility maintenance and equipment reinforcement are finished.
- •The company attributed the order wins to the yard's record in constructing very large vessels and its delivery competitiveness, while noting remaining tasks such as issuing refund guarantees, reconditioning the yard and equipment, and expanding its workforce.
JE Ocean Heavy Industries, which is proceeding with the acquisition of the Gunsan Shipyard, has secured orders to build six more tankers, lifting its orderbook to 10 vessels ahead of completing the takeover.
On September 21, the company said it signed letters of intent (LOIs) with a shipowner in Oceania covering two 157,000-ton crude oil carriers and four 114,000-ton carriers designed to transport crude oil and petrochemical products. Those tonnages fall within the Suezmax and Aframax classes, the size categories widely used in the global tanker trade.
The latest agreements follow letters of intent signed in June for four 114,000-ton crude and petrochemical product carriers. With the new orders, JE Ocean Heavy Industries has now lined up a total of 10 ships to build before completing its acquisition of the Gunsan Shipyard. In shipbuilding, letters of intent typically function as preliminary agreements ahead of formal shipbuilding contracts.
The company said the Gunsan Shipyard's track record in building very large vessels, together with its delivery competitiveness, played a major role in winning the orders.
JE Ocean Heavy Industries is a newly established corporation created by Eco Prime Marine Pacific, the largest shareholder of HJ Shipbuilding & Construction, to operate the Gunsan Shipyard. In June, the company signed an asset transfer contract with HD Hyundai Heavy Industries for the yard and has since been carrying out the follow-up procedures. It plans to complete the acquisition by the end of the year and to begin shipbuilding work early next year, once facility maintenance and equipment reinforcement are finished. With orders secured before the takeover closes, the yard — located in Gunsan, a port city on South Korea's west coast — is set to reopen with a defined construction pipeline already in place.
A JE Ocean Heavy Industries official said: “Thanks to the support of citizens in Gunsan and North Jeolla Province who have waited for the revival of the Gunsan Shipyard, and the backing of our major shareholder, we have secured 10 ships scheduled to be built this year alone.” The official added: “There is much to do, including issuing refund guarantees (RGs) for advance payments, reconditioning the yard and equipment, and expanding our workforce, but we will make every effort so the Gunsan Shipyard can become a priming water for revitalizing the local economy.” Refund guarantees are a standard safeguard in shipbuilding, under which a shipowner's advance payments are repaid if a contracted vessel is not delivered.
