The first phase of Qatar Energy’s massive LNG carrier programme is underway, with contracts signed with South Korean shipyards to construct 54 vessels
During week 41, 2022, BRL Weekly Newbuilding Contracts reported completion of the first tranche of orders, noting it was a “difficult task matching up all the Qatar business.” BRL said all of the ships will be chartered to Qatar Energy and none directly owned. The 54 ships are slightly more than one-third of the LNG carrier newbuilds required by Qatar to meet its fleet renewal expansion and renewal plans.
The latest order this week was confirmed in South Korea as coming from Norwegian owner Knutsen OAS Shipping, which firmed nine 170,000-m3 LNG carriers with Hyundai Samho Heavy Industries for delivery in 2025 and 2026. The per unit cost was US$224.5M, which is below what is being quoted by shipyards. Shipbroker Fearnleys put the average newbuilding price for a 170,000-m3 LNG carrier at US$240M for week 40, 2022. All nine LNG carriers will have two low-pressure, dual-fuel, two-stroke WinGD 5X72DF main engines. Hyundai Heavy Industries’ total order backlog at Hyundai has now risen to 25 LNG carriers. The first of this long series will deliver in November 2023.
The decision to charter the newbuilds as opposed to owning them was “likely the higher pricing after original reservation of berth slots persuaded this decision,” noted BRL.
“Individual owners from Europe and Asia have gained the benefits because minimum 10-year charters have been offered by Qatar with optional extensions. Within the LNG boom, however, owners seeking new orders with different charter employment have found construction space in short supply before 2027,” said the UK-based maritime research consultancy.
The 54 LNG newbuilds ‘soaked up’ by South Korea’s big three were fairly evenly divided, with 19 ships ordered from Daewoo Shipbuilding & Marine Engineering, 18 from Samsung Heavy Industries and 17 from Hyundai Heavy Industries. Additional LNG newbuilds were ordered for Qatari business at China’s Hudong-Zhonghua Shipbuilding.
The next round of ordering by Qatar Energy will occur in 2023, according to BRL.
All of these vessels linked to Qatar will be used to transport the increased volumes generated by the North Field East expansion and Qatar Energy and ExxonMobil’s Golden Pass LNG project in Sabine Pass, Texas. Qatar Energy owns a 70% interest in the US$10Bn project.
Golden Pass LNG is one of three US LNG export facilities that are underway that will expand US LNG peak export capacity by a combined 5.7 billion cubic feet per day (Bcfd) by 2025. Being developed on a brownfield site, Golden Pass LNG consists of three standard-size trains, each with a peak capacity of 0.8 Bcfd, for a total capacity of 2.4 Bcfd. The project will have an estimated production capacity of about 18M tonnes of LNG annually when it opens in 2024.
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