Success in Canadian sub bid could propel Korea toward wins on potential projects in Greece and Saudi Arabia

Korea could vault to the front of the race in upcoming submarine deals in the Middle East and Greece if Hanwha Ocean is selected as the preferred bidder for Canada's 60 billion Canadian dollar ($42.2 billion) submarine project, according to a Korean securities analyst.

NH Investment & Securities analyst Jung Yeon-seung wrote in a report on Monday that results of the Canadian bid and a separate offshore energy project, the Venus floating production facility, are due to be announced in June or July, and that "if the bids succeed, it is possible to strengthen the company's standing in the global market and expand expectations for follow-on orders."

Hanwha Ocean has been expanding its presence in Greece in recent weeks. The company took part in the Blue Strategy Summit 2026 in Athens on May 25, according to industry sources cited on May 27. Industry sources said on June 1 that Hanwha Ocean and HD Hyundai Heavy Industries, its partner on the Canadian bid, signed a memorandum of understanding on cooperation in Greek naval vessel programs with the Skaramangas shipyard at Posidonia 2026, a maritime exhibition that ran from June 1 to 5.

Jung wrote that the Canadian submarine program is at the preferred-bidder selection stage, with a main contract including price terms expected in early 2028 and construction revenue not likely to be reflected until late 2029 or later. He characterized the deal as meaningful less for short-term earnings than "in terms of entering the NATO market and securing a global submarine export reference."

Hanwha Ocean is competing against Germany's TKMS to build up to 12 submarines to replace Canada's aging Victoria-class fleet. Jung wrote that the Canadian program carries political variables that go beyond submarine specifications and delivery schedules, and that "at this point, there are limits to reasonably predicting the bid result."

"If the bid succeeds, by beating TKMS, the world's top submarine exporter, and entering the NATO market, there is a possibility of emerging as a strong candidate in subsequent expected submarine export competitions such as Saudi Arabia and Greece," Jung wrote.

Hanwha Ocean executives said in October that the company was in talks over submarine programs in the Philippines, Colombia, Chile and Greece, and that Middle Eastern navies were accelerating warship acquisition. The company did not identify its Gulf prospect.

Industry analysts have assumed it to be Saudi Arabia, which is expanding its naval forces as part of a broader military modernization. Greece, a NATO member, operates a German-built submarine fleet.

A Hanwha Ocean spokesperson said the company "will not only provide Greece with an optimal solution based on proven technology, but also contribute to building up the local industrial ecosystem."

The platform Hanwha is offering is a version of its KSS-III submarine, a diesel-electric design combining lithium-ion batteries with air-independent propulsion for extended submerged endurance. The in-service Dosan Ahn Chang-ho completed a 14,000-kilometer (8,700-mile) voyage to Canada last month and conducted joint communications exercises with the Canadian navy.

Canada's procurement criteria reward local production, and Hanwha has built much of its bid around manufacturing work in Canada. Hanwha, citing a KPMG analysis it commissioned, projects the program would generate an impact of 94.1 billion Canadian dollars on the country's GDP between 2026 and 2044 and support about 22,500 jobs annually through 2044.

The decision rests with the Canadian government. "We'll go from two qualified suppliers to a preferred supplier, and the government of Canada will enter into contract negotiations with the preferred supplier so we can turn lots of [memorandums of understanding] and promises into tangible outcomes for Canada," Secretary of State for Defence Procurement Stephen Fuhr told journalists on a call from Australia on Monday, according to The Canadian Press.

NH maintained a "Buy" rating on Hanwha Ocean and a target price of 175,000 won ($115). The report projected the company's revenue would rise to 13.6 trillion won in 2026 from 12.78 trillion won in 2025, with operating profit increasing to 1.64 trillion won from 1.17 trillion won.

BY KIM MIN-YOUNG [[email protected]]