Overview of Samsung E&A's Strategic Diversification

Samsung E&A, a South Korean engineering company, is actively diversifying its portfolio to gain a market advantage. This involves advancing the front-end engineering and design (FEED) work for the Abadi gas development offshore Indonesia, while also expanding its new energies and advanced technologies business segments. The company is restructuring its operations to hedge against external risks and enhance competitiveness, moving beyond its historical focus on downstream refining and petrochemicals into upstream oil and gas and now into decarbonization-focused projects.

Abadi Gas Development Project

The Abadi mega-development, operated by Inpex, is expected to produce 10.5 million tonnes per annum of liquefied natural gas (LNG) equivalent, including 9.5 million tpa of LNG and 150 million cubic feet per day of pipeline gas for local customers. Samsung E&A is undertaking FEED for the onshore LNG (OLNG) facility alongside lead contractor KBR Indonesia and partner Adhi Karya. A parallel FEED competition is also underway with a pairing of Japan’s JGC and Technip Engineering Indonesia, with the winner securing the engineering, procurement, and construction (EPC) contract. The FEED phase is on track for completion in October, with the EPC award expected by the first half of 2027. Both the client and the Indonesian government are working to accelerate the project timeline and achieve an early Final Investment Decision (FID), reflecting its strategic importance for Indonesia's energy and economic goals.

Corporate Direction and Future Opportunities

Samsung E&A views the Abadi project as a move toward LNG projects with carbon capture elements, aligning with its corporate direction of decarbonization. The company sees significant opportunities emerging across the CIS, Asia (including Indonesia and Papua New Guinea), Latin America, and Africa, with particular interest in Argentina. Regarding Middle East projects, many clients are reviewing alternative logistics routes and evaluating new site locations. LNG projects in the US are expected to gain momentum and speed up FID processes due to international demand. While some projects may experience delays, the overall outlook for project activity in the region remains positive.

Business Restructuring and Competitive Strategy

In January, Samsung E&A restructured its business divisions to redefine three core areas: hydrocarbons, advanced tech, and new energy (including carbon capture and hydrogen technologies). This reorganization aims to hedge against external risks and enhance competitiveness amid rising competition from Indian, Chinese, European, and Japanese companies. The company is confident in its track record, emphasizing that clients value executive capability and technical expertise over a price-driven environment. Branching into connected components of the offshore oil and gas supply chain, such as a collaboration with Japanese floater specialist Modec to develop carbon capture onboard floating production, storage, and offloading (FPSO) vessels, is part of its broader strategy to augment its market position.