LNG giant QatarEnergy has signed a shipbuilding deal worth about $3.9 billion with South Korea’s HD Hyundai Heavy Industries for the construction of 17 174,000-cbm LNG carriers as part of the second phase of its giant shipbuilding program.
The contract valued at 14.2 billion Qatari riyals, or about $3.9 billion, marks the start of the second phase of QatarEnergy’s LNG ship acquisition program.
This puts the price tag for a single vessel at about $229 million, much lower then the current average price for a newbuild LNG carrier in South Korea of about $260-$265 million.
The Korean vessels that were ordered as part of the first phase of the shipbuilding program were priced at about $215 million.
77 confirmed LNG carriers
Under the first phase, QatarEnergy contracted 60 LNG carriers at South Korea’s three shipbuilders HHI, SHI, and Hanwha Ocean, and China’s Hudong-Zhonghua.
Today’s agreement brings the total number of confirmed new LNG vessels to be delivered to QatarEnergy and its affiliates to 77, with more to follow, QatarEnergy said.
These “ultra-modern” vessels will support QatarEnergy’s expanding LNG production capacity from the North Field LNG expansion and Golden Pass LNG export projects as well as its long-term fleet replacement requirements, QatarEnergy said.
The firm previously said expects the number of contracted vessels to grow to more than 100 LNG carriers in the future.
QatarEnergy also previously reserved slots at the yards for these vessels and also signed multiple time charter parties with various shipowners during 2022 for the first phase of the program.
This LNG shipbuilding program is the largest of its kind in the history of the LNG industry.
In addition, LNG Prime recently reported, citing shipbuilding sources, that QatarEnergy is planning a major order of Q-Max LNG carriers at yards in South Korea and China.
Qatar’s energy minister and chief executive of QatarEnergy, Saad Sherida Al-Kaabi, signed the contract for 17 vessels in Seoul on Wednesday with Ka Sam-hyun, CEO of HD Korea Shipbuilding & Offshore Engineering (KSOE).
“These 17 LNG carriers will be built by HD Hyundai Heavy Industries to the highest technical and environmental standards and specifications. Further, the vessels are designed to achieve optimal fuel efficiency and significant reduction in carbon emissions,” he said.
LNG production expansion
QatarEnergy LNG, previously known as Qatargas, currently operates 14 LNG production trains with a capacity of about 77 Mtpa in Ras Laffan.
However, QatarEnergy is significantly increasing its LNG production from the North Field.
This first phase of the North Field expansion project will increase Qatar’s LNG production capacity from 77 to 110 Mtpa, while the second phase will further boost capacity to total 126 Mtpa.