Wärtsilä boosts capacity for LNG carrier market

Wärtsilä Corporation, Trade press release 23 January 2007 at 10:00 UTC+2

Wärtsilä and Hyundai Heavy Industries Co. Ltd (HHI) have signed an agreement to set up a 50/50-owned joint venture in Korea to manufacture dual-fuel engines for LNG (Liquefied Natural Gas) carriers. The total investment in the company will be EUR 58 million, Wärtsilä’s share being EUR 29 million. The name of the company will be Wärtsilä Hyundai Engine Company Ltd and the intended location is in South Korea.

The technology shift towards dual-fuel machinery in LNG carriers has significantly increased demand for Wärtsilä’s dual-fuel engines. The main market is Korea. Demand in the market is forecast to continue growing in pace with the increasing demand for natural gas. To date Wärtsilä has received orders for 206 Wärtsilä 50DF dual-fuel engines for 52 LNG carriers, most of which will be built in Korea. The global market share of Korea in the LNG shipbuilding market currently exceeds 70%.

“This joint venture will accentuate the strengths of two companies that are already partners; the vast know-how of the world’s biggest shipbuilder with the expertise and experience of a global leader in engine design and ship machinery. The joint venture marks a major step in Wärtsilä’s strategy to accelerate growth in the continuously expanding Asian market”, says Ole Johansson, President and CEO of Wärtsilä when signing the contract today in Korea with Ph.D. Min, Keh-Sik, Vice Chairman and CEO of HHI.

The joint venture will manufacture Wärtsilä 50DF dual-fuel engines for the Korean, Japanese, Chinese and Taiwanese shipbuilding markets. Focusing on assembly and testing of the engines, the joint venture is scheduled to deliver its first engine in the second half of 2008. The total capacity of the factory will be in the magnitude of 100 engines a year. Wärtsilä’s sales organization will continue to serve the Japanese, Chinese and Taiwanese markets whereas the Korean market will be served by the joint venture company directly.

The joint venture will utilize the established global service networks of Wärtsilä and HHI to take complete care of customers’ ship machinery needs at every stage in about 70 countries.

The Trieste factory in Italy will continue to manufacture Wärtsilä 50DF dual-fuel engines for the marine markets outside East Asia and the growing worldwide power plant market.

Wärtsilä and Hyundai Heavy Industries have a long history of close co-operation. Wärtsilä and HHI have a licence agreement to produce low-speed engines..

The deal is subject to the approvals of the relevant regulatory authorities.

Technical aspects of Wärtsilä 50DF engines
The Wärtsilä 50DF dual-fuel engine has pioneered an industry change from the traditionally-applied steam turbine machinery to a dual-fuel-electric concept with the benefits of much better operating economy and lower exhaust emissions.

The Wärtsilä 50DF is a lean-burn dual-fuel engine with a high power concentration of 950 kW/cylinder at synchronous speeds of 500 or 514 rpm.

When running on natural gas, the engine operates in a lean-burn Otto cycle. Natural gas is mixed with air in the inlet channels of the individual cylinders and ignited in the combustion chambers upon injection of a small quantity of diesel oil. The injection of this pilot fuel is regulated by an electronic control system which also adjusts the air-gas ratio to keep each cylinder at its correct operating point between knocking and misfiring limits.
In the diesel mode, the engines run on liquid fuel oil such as heavy fuel oil or marine diesel oil as a conventional diesel engine. The engines switch from gas to back-up liquid fuel instantly and automatically should the gas supply be interrupted or in the event of any other alarm, while maintaining power and speed. When the situation returns to normal it is then possible to switch back to gas mode.

Related material about the Wärtsilä 50DF can be found here.
Chronology for Wärtsilä 50DF engines and their sales success

1998 - Market introduction of the Wärtsilä 50DF dual-fuel engine.

2002 - First marine order for the Wärtsilä 50DF from Alstom Chantiers de l’Atlantique for the dual-fuel-electric LNG carrier “Gaz de France Energy” of Gaz de France. Engine configuration is four six-cylinder 50DF engines.

2003 - Factory acceptance test for the Wärtsilä 50DF engine.
The second order was placed by Alstom Chantiers de l’Atlantique for the dual-fuel-electric LNG carrier “Provalys” of Gaz de France. Engine configuration is one six- and three 12-cylinder engines.

2004 - Wärtsilä 50DF engines developed to burn also heavy fuel oil (HFO) so that 50DF engines can burn three fuels: natural gas, marine diesel oil (MDO) and HFO.
Wärtsilä 50DF orders begin to take off with first multiple-ship order, at the same time the breakthrough of the engine on the Korean market. Four LNG carriers were contracted at Hyundai shipyards, each to be equipped with two 12- and two nine-cylinder engines. A third LNG carrier was contracted in France with 50DF engines. The “Gaselys” is currently being completed at Alstom Chantiers de l’Atlantique with one six- and three 12-cylinder Wärtsilä 50DF engines.

2005 - Continued acceleration in sales of 50DF engines. Six LNG carriers contracted with Samsung Heavy Industries Co Ltd in Korea, four for A.P. Moller-Maersk and two for Kawasaki Kisen Kaisha (‘K’ Line), each with one six- and three 12-cylinder Wärtsilä 50DF engines. Wärtsilä 50DF sales extended to Japan with orders for two LNG carriers at Mitsubishi Heavy Industries Ltd for MISC Berhad, each to have one six- and three 12-cylinder Wärtsilä 50DF engines.

2006 - Growing 50DF orders in Korea. Orders for total of 30 ship sets of Wärtsilä 50DF engines were placed by various Korean shipbuilders including Hyundai and Daewoo Shipbuilding & Marine Engineering for various owners. “Gaz de France Energy” and “Provalys” enter commercial operation.
By the end of 2006, the total sales of Wärtsilä 50DF dual-fuel marine engines, in service, delivered or on order, amounted to 206 engines aggregating almost 1989 MW for 52 LNG carriers.

For more information, please contact;

Mr Jaakko Eskola, Group Vice President, Ship Power, Wärtsilä Corporation, tel +358 10 7095 634
Mr O. S. Kwon, Hyundai Heavy Industries, Executive Vice President, tel +82 52 202 7028

Notes to the editor:
About Hyundai Heavy Industries
Hyundai Heavy Industries Co., Ltd. (HHI) is one of the world's leading heavy industry companies, with 26,000 employees and net sales of USD 10.2 billion in the fiscal year 2005. HHI is also the world's number one shipbuilder and the world's largest builder of two-stroke diesel engines for ship propulsion and power generation.


About Wärtsilä Corporation
Wärtsilä enhances the business of its customers by providing them with complete lifecycle power solutions. When creating better and environmentally compatible technologies, Wärtsilä focuses on the marine and energy markets with products and solutions as well as services. Through innovative products and services, Wärtsilä sets out to be the most valued business partner of all its customers. This is achieved by the dedication of more than 14,000 professionals manning 130 Wärtsilä locations in close to 70 countries around the world. In 2005 Wärtsilä generated net sales totalling EUR 2.6 billion.