By Oleg Vukmanovic and Joyce Lee
LONDON/SEOUL, March 6 (Reuters) - South Korean shipbuilderSamsung Heavy Industries on Wednesday cancelled a$2.39 billion order from Oslo-listed Flex LNG for four floatingliquefied natural gas (FLNG) production units, the companiessaid.
Samsung said in a regulatory filing on Wednesday that it hadcancelled the order, first made in 2008, due to a lack offinancing by the European buyer.
Although Samsung did not name the company, Flex LNGconfirmed in a separate statement on Wednesday that the orderfor four FLNG vessels has been abandoned.
Although prospects for the floating LNG industry havebrightened, thanks to technological innovations, it remainscommercially untested and no such facilities currently exist.
Royal Dutch Shell is the only company so far tohave taken the leap with its flagship Prelude project off thecoast of western Australia, due to be delivered by Samsung in2016.
Flex and Samsung have held regular talks over the past fewyears in an attempt to resolve a dispute over a $458.7 milliondown payment that Flex LNG made to Samsung on the four orders.
In talks last year, Flex LNG wanted Samsung to redeploy thecapital for the construction of a conventional LNG tanker, butthe companies failed to reach a resolution, Flex LNG said.
"As previously announced, FLEX LNG considers the fourshipbuilding contracts ... that were entered into with SHI(Samsung Heavy Industries) in 2008, to have been abandoned," itsaid in a statement.
"FLEX LNG has requested that SHI repays a net amount inexcess of USD 300 million and appropriate actions are beingtaken to secure the repayment of the said funds," it said,referring to arbitration proceedings.
The firm hired lawyers Pincent Masons to claw back the moneypaid-in, which Samsung considers non-refundable, and has takensteps to initiate arbitration proceedings, it said.
