Amid strug­gle, wave of va­ri­ety in ves­sels rises

China Daily (Hong Kong) - - BUSINESS - By ZHONG NAN zhong­nan@chi­nadaily.com.cn

With Chi­nese ship­yards’ key cus­tomers of the global oil in­dus­tries strug­gling to raise prices due to pres­sure from greener en­ergy such as wind power, nat­u­ral gas and green ve­hi­cles like those made by Tesla, the for­mer are look­ing to stay afloat by build­ing more off­shore fa­cil­i­ties and spe­cial­ized ves­sels than low-end oil rigs.

China Ship­build­ing In­dus­try Corp, one of the coun­try’s ma­jor State-owned ship­yards by rev­enue, plans to be­come more pro­fi­cient in build­ing float­ing off­shore plat­forms, ocean farm­ing fa­cil­i­ties, asphalt tankers, dredgers, der­rick pipe-lay­ing, ce­ment ves­sels and heavy lift ves­sels, which will al­low it to di­ver­sify its prod­uct port­fo­lio and broaden cus­tomer base.

Last month in Qing­dao, East China’s Shan­dong prov­ince, CSIC’s Wuchang group de­liv­ered the world’s first group of in­tel­li­gent off­shore ocean farm­ing fa­cil­i­ties to its Kverva, Nor­way-based client SalMar ASA. Wuchang Group will also ex­port six off­shore fish farms to Nor­way to help up­grade the lo­cal salmon farm­ing busi­ness.

It is the world’s first off­shore salmon farm­ing equip­ment built us­ing the same con­cept as semisub­mersible in­stal­la­tions in the off­shore oil and gas drilling sec­tor, said Yang Zhi­gang, chair­man of Wuchang Group.

Un­like tra­di­tional fish farm­ing fa­cil­i­ties, the ocean farm adopts ad­vanced tech­nolo­gies in­clud­ing au­to­matic fish­ing, hy­dro­log­i­cal mon­i­tor­ing, deepsea po­si­tion­ing and bi­o­log­i­cal light ad­just­ment sys­tems.

China also plans to build 20 float­ing re­ac­tor plat­forms to meet the de­mand for mar­itime atomic propul­sion to en­sure its power sup­ply. China Gen­eral Nu­clear Power Group signed a strate­gic co­op­er­a­tion agree­ment with CSIC to de­velop a re­ac­tor de­sign for the 200megawatt ACPR50S off­shore nu­clear power plat­form last year.

CGN is cur­rently work­ing on the pre­lim­i­nary de­sign for this plat­form, which is ex­pected to start con­struc­tion within this year and be com­mis­sioned by 2020.

The float­ing nu­clear power plant, which can be in­stalled in a sec­tion of the ves­sel, is of­ten used to sup­ply sta­ble elec­tric­ity not only to re­mote ar­eas but large in­dus­trial fa­cil­i­ties such as sea­wa­ter de­sali­na­tion plants and off­shore oil­field ex­plo­ration rigs.

CSIC has set up an in­dus­trial fund with an ini­tial cap­i­tal of 10 bil­lion yuan ($1.53 bil­lion) to fur­ther in­vest in fields such as off­shore en­gi­neer­ing prod­ucts, power, elec­tronic in­for­ma­tion and in­tel­li­gent equip­ment, and un­der­wa­ter de­fense.

With a work­force of about 150,000 em­ploy­ees, the group op­er­ates more than 50 in­dus­trial sub­sidiaries and 30 re­search in­sti­tutes, and has ex­ported var­i­ous types of ves­sels to more than 70 coun­tries.

“If you look at the global mar­ket for low-end oil rigs and bulk ships, you can see signs of de­cline ev­ery­where,” said Jin Peng, sec­re­tary-gen­eral of the China As­so­ci­a­tion of the Na­tional Ship­build­ing In­dus­try.

It is com­mon for ship­yards to fi­nance a project in ad­vance af­ter re­ceiv­ing an or­der in the cur­rent mar­ket set­ting. How­ever, af­fected by fall­ing de­mand, many shipown­ers now de­lay de­liv­ery and pay­ment, and some­times even aban­don their or­ders.

“It surely makes mat­ters worse that pre­pay­ments have also dropped from 80 per­cent of the to­tal cost to between 30 per­cent and 20 per­cent in ship­yards in re­cent years, not only in China but in South Korea, Sin­ga­pore and Ger­many,” said Jin.

“Many shipown­ers from Europe, the United States and South Amer­ica come up with many dif­fer­ent ex­cuses to de­lay pay­ment, such as a change of de­sign or im­ple­ment­ing stricter qual­ity checks. They know they have no work for the ships or oil rigs, so they would rather not take de­liv­ery.”

CHEN HAO / FOR CHINA DAILY

An anime shows a 3,500-cu­bic-me­ter / hour cut­ter-suc­tion dredger dur­ing a re­cent is­land-mak­ing sea tech­nol­ogy ex­hi­bi­tion in Fuzhou, Fu­jian prov­ince.

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