□ Due to ongoing population growth and intensifying urbanization around the world, the need for developing marine resources as a way to address growing demand for energy and resources is being emphasized. The offshore plant industry manufactures, builds, installs, and operates equipment and facilities that are needed to commercialize various marine resources including oil and gas, minerals, and new and renewable energy. Despite its dramatic growth in the mid- to late 2000s, the domestic offshore plant industry is undergoing a crisis due to continuing losses in recent years. On the surface, such losses appear to have been caused by a lack of work resulting from fewer orders, but in reality, the current crisis was actually caused by the three major shipbuilders’ lack of front-end engineering & design (FEED) capabilities, which has led to extension of delivery dates on their respective offshore plant orders.

□ To address this lack of high value-added, essential technological capabilities, the Research Institute of Ships and Ocean Engineering (“KRISO” hereinafter, President Suh, Sang-hyun) established the Advanced Technology Engineering Center (“ATEC,” hereinafter) last year. ATEC, temporarily housed at Pukyong National University, will eventually have a permanent address in Saenggok District, Gangseo-Gu, Busan. The center, in which a total of 50 billion KRW will be invested by the Ministry of Trade, Industry and Energy, KRISO, and Busan Metropolitan City using the government expenditure, Busan municipal government expenditure and private funds, is expected to serve not only as a key infrastructure to support offshore plant business creation but also as a world-class research foundation for offshore plant engineering in Korea, which will promote collaborative projects between overseas engineering companies and Korean large companies, small and medium businesses, and research institutes.

□ In an effort to strengthen Korea’s technological competitiveness in the offshore plant engineering field, ATEC is striving to raise the level of human resources to match that of global engineering firms. Already, the center has recruited several engineers from the US and the UK in March, and is steadily bringing in outstanding researchers one after another. The newly recruited are veteran engineers of the offshore plant industry who have worked in various parts of the industry ranging from project planning and order winning, design, and technology application process to equipment. They will team up with entry-level or mid-level engineers to play a leading role in their respective teams to win orders for offshore plant projects from oil majors overseas. Also, by jointly developing mega-scale offshore plant projects with global engineering firms, ATEC will spread the projects to domestic shipyards, engineering firms, and equipment manufacturers in order to create new business opportunities for the domestic industry and to realize domestic engineering independence. In other words, ATEC aims to realize its vision of “making inroads into new markets,” “fostering a sustainable, industrial ecosystem,” and “creating more jobs” by working together with global engineering firms.

□ To this end, KRISO signed a memorandum of understanding with Lloyds Energy based in Dubai to jointly carry out a coastal marine liquefied natural gas (LNG) project on May 13, with a view to invigorate the domestic offshore plant industry and to achieve technological independence. The coastal marine LNG project involves installation and transport of a coastal floating LNG (FLNG) facility that will receive natural gas from Russian inlands and neighboring Far Eastern regions, the Baltic Sea, and Black Sea through pipelines and to transport it in a liquefied form.

□ Lloyds Energy proposed the Korean Industry Participation Plan (KIPP) to ensure Korea’s industrial development. Under this plan, Korea's own equipment will be used for 35%-50% of the project, and Korean engineering techniques will account for 10-50% of what will be applied to each FLNG. With this MOU, the Korean shipbuilding and offshore plant industry is planning to build several FLNGs in sequence. ATEC will share the same level of owners’ engineering as that of the project owner, and to carry out KIPP, it will also oversee design, identify domestic equipment suppliers suitable for the project, and perform pre-qualification (PQ). ATEC and Lloyds Energy are expecting that the Korean offshore plant industry will be energized with about 10,000 jobs created over 5 years. In addition, the two parties anticipate that this project will be a foundation to jointly win and operate coastal FLNG projects in other parts of the world in the future.

□ The cooperation will serve as a crucial opportunity for Korea to establish a foundation to become a leading country of technology in the offshore plant industry with unparalleled technological prowess, as the MOU will pave the way for Korea to not only nurture high-tech talented individuals and create employment, but it will also allow the country to achieve technological independence in the engineering field and to strengthen its competitiveness. There is a saying, “Opportunities are found in times of crisis.” In the midst of a crisis affecting the entire shipbuilding and offshore plant industry of Korea, ATEC of KRISO is a hope that will spark new opportunities to enhance the fundamental quality of the offshore plant industry.