Geoje Shipbuilding and Offshore Plant Materials, Parts, and Equipment Specialized Complex Selected ... Promoting FLNG Localization

Gyeongsangnam-do is set to begin full-scale efforts to localize core technologies and equipment for floating liquefied natural gas (FLNG) production facilities.

On September 17, Gyeongnam Province announced at a briefing held at the provincial government press center that the "Gyeongnam Geoje Shipbuilding and Offshore Plant Materials, Parts, and Equipment Specialized Complex" has been finally selected in the third round of the Ministry of Trade, Industry and Energy’s call for designation of specialized complexes for materials, parts, and equipment.

The specialized complex for shipbuilding and offshore plant materials, parts, and equipment will be established on an area of approximately 624,500 square meters (about 189,000 pyeong) encompassing Okpo National Industrial Complex, Deokgok Industrial Complex, and Obi 2 Industrial Complex in Geoje City.

Between 2027 and 2031, a total of KRW 7.45 billion will be invested, with KRW 4.15 billion in central government funding, KRW 1.5 billion in provincial and local funds, and an additional KRW 1.8 billion invested by regional anchor company Hanwha Ocean.

Explanation material on the specialized complex for shipbuilding and offshore plant materials, parts, and equipment in Geoje, Gyeongnam.
[Image provided by Gyeongnam Province]

Floating liquefied natural gas (FLNG) facilities are high value-added marine plants that liquefy, store, and ship natural gas produced at offshore gas fields directly at sea.

They are well-suited for the development of deep-sea or remote gas fields where the construction of onshore plants is difficult, and demand from global energy companies has been growing rapidly.

Such facilities, three to four times the size of a soccer field, require high-level engineering skills, as plant design, complex chemical processes, piping, and specialized liquefaction facilities must be precisely arranged. The contract price for a single FLNG unit can exceed KRW 4 trillion.

Although the domestic shipbuilding industry has unmatched competitiveness in constructing these facilities, FLNG technologies and major equipment are dependent on certain overseas companies. As a result, for every FLNG unit built, 2-3% of the contract value is paid out in royalties for technology.

The “fixed vendor” structure, where key equipment specified by clients must be sourced from overseas suppliers, has made it difficult for domestic firms to participate in the FLNG business. This has resulted in decreased business profitability and instability in equipment supply.

Core Objectives of Gyeongnam Geoje Shipbuilding and Offshore Plant Materials, Parts & Equipment Specialized Complex.
[Image provided by Gyeongnam Province]

Gyeongnam Province plans to use the newly designated specialized complex to secure its own gas liquefaction process technology and localize core FLNG materials, parts, and equipment such as moisture adsorbents, turboexpanders, and cryogenic heat exchangers, thereby reducing overseas dependence.

The province will also form a shipbuilding and offshore plant materials, parts, and equipment alliance together with Geoje City, Gyeongnam Technopark, local universities, and research institutions—supporting business collaboration, investment, and competitiveness enhancement among companies.

Support will be provided across research and development, demonstration, testing, evaluation and certification, workforce training, commercialization, and market development—enabling shipbuilding equipment companies to expand into eco-friendly and high value-added fields.

Through these efforts, the plan is to establish an industrial ecosystem in which orders won by major shipyards directly drive growth among local small and medium-sized enterprises.

Hanwha Ocean will participate in the localization of key technologies, performance verification, demonstration support, and technological advancement of allied companies in the materials, parts, and equipment sector, leveraging its capabilities in offshore plant design and construction as well as its experience with global projects.

The company also plans to invest a total of KRW 1.522 trillion by 2031 in large offshore plant construction equipment, smart manufacturing automation, and the establishment of safety management systems.

Choi Manrim, Vice Governor for Economic Affairs of Gyeongnam Province, is announcing the final selection news and development strategies of the specialized complex for shipbuilding, marine plants, materials, parts, and equipment in Geoje, Gyeongnam Province.
[Photo by Lee Seryeong]

Gyeongnam Province expects that localization of FLNG core technologies and equipment will reduce outflows of royalties abroad, as well as greatly enhance the profitability and contract competitiveness of domestic shipbuilders.

Additionally, the province anticipates that the establishment of a stable domestic supply chain will help respond to changes in the global energy market and contribute to national energy security.

Furthermore, it is projected that designation as a specialized complex will generate an economic output effect exceeding KRW 4.2 trillion and create employment opportunities for approximately 19,000 people.

In a situation where the Chinese shipbuilding industry is intensifying its pursuit, the province assessed that achieving technological self-reliance in FLNG, securing original technologies for eco-friendly and high value-added offshore plants, and establishing a robust supply chain for materials, parts, and equipment will become a key foundation for Korea to further strengthen its shipbuilding competitiveness and maintain its competitive lead.

Deputy Governor for Administrative Affairs Choi Manrim emphasized, "This specialized complex for shipbuilding and offshore plant materials, parts, and equipment in Geoje is an important turning point that will elevate the competitiveness of Korea's shipbuilding industry beyond Gyeongnam."

He added, "By achieving self-reliance in FLNG core technologies and the localization of materials, parts, and equipment, we will develop Gyeongnam into a world-class cluster for shipbuilding and offshore plants and take responsible steps to secure the unparalleled competitiveness of K-Shipbuilding."

This content was produced with the assistance of AI translation services.