HD Korea Shipbuilding extends $1.44 billion Mexico FPU contract

HD Korea Shipbuilding & Offshore Engineering said Wednesday that the value of a floating production unit contract signed by its shipbuilding subsidiary for a deepwater oil field off Mexico is 1.95 trillion won ($1.44 billion), and that the deadline for delivering the vessel has been pushed back two months to June 1 next year.

The revised amount equals 21.6 percent of the company's revenue. The company attributed the change to revised terms of the deal, which HD Hyundai Heavy Industries is carrying out for an unidentified oil developer based in Mexico. The contract was originally signed on June 30, 2023, with work beginning the following day.

The unit is the first floating production unit for the Trion deepwater oil field, ordered by Australia's Woodside Energy and the first deepwater development project in Mexico. HD Hyundai Heavy Industries is building the vessel on a turnkey basis, covering both the hull that keeps it afloat and the topside facilities that process crude. The facility measures 94 meters in length, 94 meters in width and 57 meters in height, and weighs about 44,000 tons. It is designed to produce 100,000 barrels of crude oil and 4.1 million cubic meters of natural gas per day.

Payment will be made in stages as construction progresses, and the contract carries no down payment or advance, HD Korea Shipbuilding & Offshore Engineering said in a regulatory filing. The company said the filing reflects a correction to an earlier disclosure of the same contract.