The technology, known as SENSE IV, is often referred to as the “heart” of the FLNG unit, a massive offshore structure that extracts, liquefies and transfers natural gas from subsea fields.

FLNG construction usually costs between 2 trillion won and 4 trillion won ($1.5 billion-$3 billion) per unit, with liquefaction equipment accounting for as much as 35% of that figure. Despite Korea’s dominance in shipbuilding, critical components such as LNG liquefaction systems have long been supplied by US and European firms, including North Carolina-based engineering firm Honeywell International Inc.

With SENSE IV, Samsung Heavy is aiming to break that reliance and drive a trickle-down effect across the Korean shipbuilding industry.  According to industry sources on Wednesday, Samsung is in talks to supply an FLNG equipped with its in-house SENSE IV technology to an Italian energy major.

Samsung-built FLNGs have so far used imported liquefaction systems licensed by US-based engineering firm Honeywell International Inc.

With the localization of the liquefaction technology, however, future orders from the Italian firm will be outfitted with Samsung’s own equipment, sources said.

While Korea has localized up to 70% of the lower hull structures on FLNGs, the topside, which includes the high-value liquefaction equipment, remains only 30 to 40% localized.  That imbalance has left domestic players exposed to foreign licensing costs and after-sales constraints, analysts said.