Energy giant Shell has scrapped a KRW 5.27 trillion ($4.62bn) order at Samsung Heavy Industries (SHI) for three floating LNG (FLNG) units.
The deal was struck last year and the facilities were due by the end of November 2023.
But the Korean shipbuilder said on Thursday the contract was torn up due to worsening market conditions.
Samsung said last year that the price was only for hull construction and could increase as remaining parts like decks were signed for in the second half of 2016.
The units were to be handed over to Shell Gas & Power Development in the Netherlands.
They were destined for the Browse basin in Australia, but Woodside Petroleum pulled the plug on the scheme in March, placing a question mark over the order.
A Shell spokesman said: “Following the decision by the Browse joint venture partners not to proceed with the current concept for Browse due to the prevailing economic and market environment, we can confirm that the FEED contract for Browse FLNG with the Technip-Samsung Heavy Industries Consortium (TSC) has been terminated by the operator.”
The company added that as a result, the engineering, procurement, construction and installation (EPCI) contract for Browse FLNG is no longer required and has also been terminated.
The EPCI contract had as yet no monetary value, it said.
