Samsung Engineering on the journey to transform into a green solutions provider

Amid a fast-changing market landscape for the oil, gas and the energy industry, Samsung Engineering President and CEO, Sungan Choi, speaks to Energy Connects ahead of ADIPEC 2022 on securing sustainable growth, how the company is driving smart and renewable energy systems, and why ADIPEC is the focal point of the industry this year.

How is Samsung Engineering focusing on the energy transition within the Engineering, Procurement, Construction and Project Management space and growing as a green solutions provider?

In addition to being a world-class EPC player, Samsung Engineering is advancing to become a green solution provider. We are not just delivering hydrocarbon projects in a more energy efficient manner but also venturing into new business segments in response to changing industry trends and global demands to build a more sustainable future.

Under the slogan of “Beyond EPC—Green Solution Provider,” we are taking the necessary steps to lay down the foundation for a sustainable growth by securing future growth engines and establishing stable revenue sources from new businesses in the green sector.

We invested 78 billion won (approximately USD 60 million) in Environment, Social, Governance (ESG) business areas such as green technology solutions (hydrogen and carbon neutral) and environmental infrastructure. Furthermore, we are also co-developing a clean hydrogen project to import cleaner energy alternatives and contribute in Korea›s carbon neutrality goal.

What are some of the recent project wins for Samsung Engineering? How do they indicate the direction the industry is taking amid evolving market dynamics?

Some of the highlights from recently awarded projects include PEMEX Dos Bocas Refinery Project in Mexico (over US $3.5 billion, which is the largest contract for Samsung Engineering), the Sarawak Methanol Project in Malaysia (over US $1 billion) and an Onshore Gas Plant for Sarawak Shell Berhad
in Malaysia (approximately USD 700 million).

At the heart of these projects is our new business strategy—“Shift-left.” The shift-left strategy refers to expanding the business value chain to the front-end loading (FEL) phase and turning FEL phase work into EPC project opportunities.

As such, we are expanding our business portfolio to pre-EPC jobs including FEED projects based on our technological competence to offer a full-spectrum of services to clients. The FEED to EPC strategy allows us to implement various innovative strategies such as early design finalisation and maximisation of offsite construction so that we can reduce overall project schedule and cost.

By participating at a pre-EPC phase and seamlessly integrating FEED and EPC work, we are bringing greater value and project success to our clients.

Do you expect an uptick in industry investments, especially in EPCC projects, as post- pandemic energy demand grows?

As energy demand grows and capital expenditure of major oil companies is set to see strong gains with oil price forecast to average above USD 80/bbl for 2022 and 2023, IOCs and other oil majors reported record high earnings at H1 of 2022.

However, high commodity prices, economic downturn and re- spread of the COVID-19 pandemic are set to slow energy demand growth and increase market uncertainty. In fact O&G capital expenditure remains subject to future reductions as more capital is diverted mitigating carbon emissions.

In addition, as clients are trying to secure profits even when oil prices fall, only the most favorable projects are left in a position for final investment decisions.

With a diminishing number of projects meeting the strict criteria, the prospect of EPCC project looks dim and more competitive. Samsung Engineering is trying our best to reinforce market competitiveness and to put the utmost efforts into projects for our valued clients.

How important is ADIPEC 2022, both to your company and to the global oil, gas and energy industry?

ADIPEC is certainly one of the most important yearly events for Samsung Engineering, and our participation and presence in the event has increased since we first joined ADIPEC back in 2014, especially by attending the CEO Plenary Sessions.

Since 2016, we have set a booth to showcase our latest management tools and technologies, which show how Samsung Engineering can improve efficiency in project execution. We are very proud to be Gold Sponsor for three consecutive years.

ADIPEC is significant to Samsung Engineering not only as a main platform to have networking opportunities with major clients and vendors to share our business strategies and experience, but as a valuable venue to gain insights about industry trends and future prospects. More importantly, ADIPEC brings all stakeholders across the industry value chain together ranging from government entities to major oil companies, guiding them to learn where the industry is heading.

What will be the major theme for Samsung Engineering’s appearance at ADIPEC this year?

Keeping in line with ADIPEC 2022’s theme “Driving Smart, Sustainable & Renewable Energy System,” we will be presenting a range of in-house tools and innovative strategies which are designed to carry out capital projects more efficiently and increase certainty and visibility in cost and schedule management.

These innovative solutions will cover the entire EPC project lifecycle. As for Engineering, we will introduce Engineering Data Platform (EDP), our own engineering database system which automatically connects and shares engineering data among different engineering disciplines. For Procurement and Fabrication, we will give an overview about the benefits of modularisation and 3D route simulations.

We will demonstrate smart fabrication shops and facial recognition system for Construction and Advance Work Package (AWP) system and inspection platform as our own Project Management solutions. We look forward to inviting attendees of ADIPEC to our booth stand to show what Samsung Engineering can offer.