163 Million Claims! Hyundai Heavy Industries Also Spread Out Big Events

- Apr 02, 2018-

163 million claims! Hyundai Heavy Industries also "spread out big events"

The contract amounted to 860 million U.S. dollars and the claim amounted to 2.6 billion U.S. dollars! Just after Samsung Heavy Industries and Daewoo Shipbuilding just announced the withdrawal of orders for four drilling vessels with a total value of approximately US$2.2 billion, Hyundai Heavy Industries is now facing huge maintenance claims and arbitration. The three largest shipbuilding giants in South Korea are “spreading major events”. Are the troubles of marine equipment! glenflange


On March 26, Hyundai Heavy Industries said that Barzan Gas Company, a subsidiary of Qatar Petroleum, has filed an arbitration lawsuit against the International Chamber of Commerce (ICC) and requested Hyundai Heavy Industries to perform maintenance work of US$2.6 billion (about 16.3 billion yuan).


In January 2011, Hyundai Heavy Industries obtained the contract of Barzan Gas Company, which is responsible for the construction and installation of upper modules, deck cabins, and pipelines for offshore natural gas facilities. The contract value is approximately USD 860 million. Hyundai Heavy Industries delivered these facilities in April 2015; however, Barzan Gas Company later claimed that certain parts of the pipeline were flawed, that there was a gas leak in an upstream pipeline, and that Hyundai Heavy Industries had to use a more robust pipeline for full replacement. EQUAL TEE


Hyundai Heavy Industries said that the Barzan Gas Company's maintenance requirement is more than three times the price of its project contract and is unlikely to win litigation. Hyundai Heavy Industries has formed a team of legal advisors and engineering consultants, and will try to make "reasonable" off-court settlements with Barzan Gas Company within its 220 billion won (about 233 million U.S. dollars) maintenance cost reserve.


Hyundai Heavy Industries said that the upstream pipeline material had previously been judged to be unsuitable for the surrounding environment, but Barzan Gas Company insisted on the use of this material; secondly, it was very unreasonable to replace all the pipelines only because of the gas leakage in some of the pipelines. Welding neck flange


Hyundai Heavy Industries pointed out that Barzan Gas Company admitted to a certain extent that it had problems in the original design and ordering of the pipeline. The company required Hyundai Heavy Industries to replace all the pipelines with more robust ones, and the high prices were five times that of the pipelines.


An industry source revealed that Barzan Gas Company originally required Hyundai Heavy Industries to use carbon steel to build the upstream pipeline, but after the gas leak problem, the company now hopes to replace all the pipes with a corrosion-resistant alloy.


In response to the difficulties faced by the three giants in South Korea, industry sources have said that marine equipment is not just a complete construction but a systematic project. The lessons learned from the Korean shipbuilding industry are very profound. They once again raised a wake-up call for China’s shipbuilding industry. Equipment is a "pit," and if it is not fully prepared, it should not be easy to get involved.