China's shipbuilding glut menaces Singapore and S. Korean Rig Builders

China's Offshore Push Shakes Singapore Builders of Oil-Drilling Rigs - WSJ.com | ... this is a sector where South Korean yards are well-established and China is a growing presence. Asian shipyards, mostly from these three countries, control about 75% of the market for offshore drilling equipment . . . Chinese yards are on track in 2013 to win the largest number of rig orders they've had in any single year, helped by a sustained drive to redeploy resources from the glutted shipbuilding sector. Beijing's five-year economic-development plan, which runs through 2015, calls for developing three coastal hubs for offshore equipment: Bohai Bay, the Yangtze River Delta and the Pearl River Delta. China's goals for the five-year period: sales of 200 billion yuan ($32.3 billion) and 20% of the global market for offshore products like rigs and platforms. To achieve this-- and to gain technological know-how -- Chinese yards are willing to undercut competitors and sacrifice profit, said Vincent Fernando, director of Asean Research at Religare Capital Markets.  ... Last month, Keppel announced a new drillship design it plans to introduce in 2014. Drillships, used in water up to three kilometers deep, cost four times as much as jack-ups. Whether Singapore and China can compete with South Korean yards in this specialized area is still to be seen. ... At the cutting edge offshore are floating gas-processing plants, which collect gas piped from reservoirs under the sea bed, chill it to liquid form and then load it into pressurized ships for transport. South Korea's Samsung Heavy Industries Co. Ltd. (010140.SE) is building a behemoth for Royal Dutch Shell (RDSA.LN, RDSA) that analysts estimate will cost $10 billion to $12 billion. Still several years from delivery -- it's to be anchored hundreds of miles off Northwestern Australia -- it will measure 500 meters long and displace 600,000 tons. Think six aircraft carriers.