Chung Joon-yang, POSCO’s chief executive officer and chairman, held a meeting with Cameroon Prime Minister Philemon Yang on July 23 and entered into an MOU for cooperation on steel industry development and offshore plant fields, the businesses Cameroonian government has been striving for.

Chairman Chung Joon-yang signed an MOU on ‘Steel Industry Cooperation’ and ‘Offshore Plant Cooperation’ with the Cameroon government at the Cameroon Prime Minister’s official residence. From the left, Minister Fuh of the Industrial Mining Technology Development Division, Chairman Chung Joon-yang, Cameroon Prime Minister Philemon Yang and Chairman Nyassa of the CNIC Board of Directors.

POSCO, which has served a pivotal role for Korea’s 5-year economic development plan in the 1970s, will be joining hands with Africa’s newly rising nations to pass on technology and know-how in the steel and offshore plants.

Cameroon has 5 billion tons of iron ore deposits and produces deoxidizing gas, which are essential for steel-making. Also, it is ideally located to stably supply steel materials to countries around the Gulf of Guinea. This fact will be a great boost for POSCO because the area has been showing more than 8 percent growth rate for recent years in terms of annual steel consumption.

Since 2011, Cameroonian government has requested supports from POSCO for the development of the nation’s steel industry. In response, POSCO proposed the ‘Cameroon Steel Industry Development Policy’ in 2012 and provided necessary supports to boost Cameroon’s newly emerging industry. With the MOU signed by Chairman Chung and Prime Minister Yang, POSCO will continue working with a suitable model to bolster the steel industry of the West Africa.

Cameroon is also located at the center of the Gulf of Guinea which produces more than 4 million tons of crude oil daily, making it an optimal location for jack up rigs and offshore plant repair. POSCO will additionally sign cooperation MOU with the shipyard operated by the Cameroon government, carrying out investment cooperation as well as technological training in the offshore plant repair field, and searching for joint project opportunities.

What is CLOV FPSO project?

The CLOV project, consisting of the oil fields at Cravo, Lirio, Orqudea and Violeta in Angloa’s offshore, involves the integrated development of a four-field cluster on the northwest sector of Angola’s offshore block 17, in water depths ranging from 1,100 to 1,400m. The FPSO (Floating Production, Storage and Offloading) facility to be utilized for the project is designed to receive, process, and store oil or natural gas, and can be maneuvered to serve different locations.

POSCO, the first steel manufacturer to provide the entire supply

Two years ago, Total, the project operator, awarded Daewoo Shipbuilding & Marine Engineering (DSME) a $1.8 billion engineering, procurement, installation and construction contract for the FPSO. With its 34-year relationship with DSME, POSCO became the first steel manufacturer to provide the entire supply of thick plate steel for a major offshore facility, from a single mill. This included some 88,000 tons of steel plate. The scale of the CLOV floating facility is huge, involving construction of what will be one of the world’s largest FPSOs. The vessel is 305m long, 61m wide, and weighs 110,000 tons. After the Pazflor FPSO, CLOV is reputed to be the second-largest FPSO in the world.

POSCO ‘Z Quality’ steels

Steel selection was a key component of the FPSO design and construction, and the need to procure high-strength, quality steel in turn underscored the importance of selecting the correct steel manufacturer. POSCO was already registered with Total as a supplier capable of meeting the strict requirements for offshore structures, one that could quickly respond to changes in plans and requirements, as needed.

POSCO was also able to meet technical requirements that only a few mills in the world are capable of meeting. Out of the total 88,000 tons of steel supplied, approximately 20,000 tons were Z quality (low-sulphur steel with tested level of ductility through the thickness direction) for the topsides and hull. These high-quality steels are often specified for critical applications, since they must endure high levels of stress. Besides, the POSCO facilities in Korea are one of the few steel mills capable of producing and supplying these Z quality steels.

POSCO completes the job in just 10 months

Another challenge was the short construction timeframe called for on the CLOV project. For most offshore facility construction projects, suppliers typically have one year to complete their order. Often, the extended time period is needed to allow for changes in design and specification that inevitably arise over the life of such projects. Here again, POSCO’s ability to respond quickly proved vital.

POSCO was able to develop and incorporate offshore structure steel production technology and lessons learned from its involvement in the Pazflor FPSO project, again with Total and DSME, As the first company in the steel industry to implement the Process Innovation business management software system since 1999, POSCO has been able to successfully manage the total process through this established IT system, receiving orders and delivering supplies quickly in response to client requests. Based upon this technical skill, POSCO was able to respond appropriately and in a timely manner during the CLOV FPSO construction process, when design changes and sudden requests were made. Even with design changes and sudden requests, the Korean steel supplier was able to provide its deliverables in approximately 10 months, from January to October 2011.

Once the final stage of work on the FPSO are completed this spring, the vessel will be prepared to sail away in May to its designated location in Angola’s offshore block 17. There, it will be moored and stationed in preparation for a mid-2014 commissioning.

POSCO will continue to sail on

In September 2011, POSCO agreed with Shell, a multinational oil company, to exclusively supply thick plates the firm needs for offshore plant projects by 2016. POSCO has also signed an MOU with GE to co-develop and supply rolled steels and related technology for energy plants.

In partnerships with POSCO E&C, Daewoo International Corporation, SungJin Geotec and other POSCO Families, POSCO is aiming to complete the developments of over 60 types of energy steel materials for obtaining energy plant contracts as well as supplying relevant steel materials. In doing so, POSCO targets to gain a 10% market share of the global energy thick plate industry by 2020.