Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries are fiercely vying for Russia’s mammoth project to build 16 LNG carriers, industry sources said on Monday.

The nation’s major shipbuilders were selected as preferred bidders for Russia’s gas carrier project scaled at $5.6 billion, according to the sources.

The Yamal project is led by Russia’s largest independent natural gas producer Novatek and France-based global oil and gas supplier Total.

The Korean firms gained the upper hand over their Japanese rivals, Mitsubishi Heavy Industries and Kawasaki Heavy Industries, as well as Russia’s state-run United Shipbuilding Corporation, the sources said.

The project involves the construction of 16 liquefied natural gas carriers in total, each with icebreaking capacities sufficient to respond to arctic climate conditions.

Because of this special function, the unit cost of each carrier is estimated at $300 million or more, which is double or triple the amount of an average liquefied petroleum gas carrier, the sources said.

“The number of ships involved in this initial bidding, or the amount involved, has not yet been clarified,” said a Samsung official.

“But considering that the usual practice of the shipbuilding industry is to select a single bidder, instead of dividing the deal, the final winner may end up hitting the jackpot.”

Despite its world-class technology in shipbuilding, Korean heavy industry has so far been relatively passive in the icebreaker sector.

“Total is demanding Arc-7 ice class carriers, capable of sailing through 2.5-meter-thick arctic ice, which is a top-level technical standard,” said an official.

“To meet such requirements, the carrier may have to adopt an electric Azimuth propeller system, which may maintain a 360-degree revolution at all times without colliding with ocean ice.”

Though both Korean shipbuilders have relatively little experience in icebreakers, SHI displayed confidence in the competition, citing its initiative in the LNG carrier sector.

DSME, on the other hand, also claimed to be equally competitive with its decades-long career in ships and studies in icebreakers.

Meanwhile, challenges from Chinese competitors are also plausible, especially when Chinese oil company Chinopec joins the Yamal project, officials said.

Though further details are yet to be released sometime next month, the final winner is expected to be confirmed by the end of the year, according to officials.

By Bae Hyun-jung (tellme@heraldcorp.com)