QatarEnergy finalizes HD Hyundai LNG carrier deal as talks with other yards continue

State-owned LNG giant QatarEnergy has finalized its previously announced deal for 17 LNG carriers with South Korea’s HD Hyundai Heavy Industries as it continues to hold talks with other yards over the second phase of its giant shipbuilding program.

According to a statement by South Korea’s Ministry of Trade, Industry and Energy (MOTIE), HD Hyundai and QatarEnergy officially signed the shipbuilding deal worth about $3.9 billion in Doha on October 25 as part of President Yoon Suk Yeol’s state visit to Qatar.

MOTIE said this follows the framework agreement the two firms signed in September this year.

Prior to this, QatarEnergy signed a deal with HHI in 2020 to reserve slots for its giant shipbuilding program.

HHI’s parent HD KSOE also announced on Thursday that the shipbuilding contract was signed on October 25 and includes the construction of 17 174,000-cbm LNG carriers.

This is the largest order ever received in the Korean shipbuilding industry based on a single contract, it said.

KSOE said that HHI will deliver the 299 meters long and 46.4 meters wide vessels sequentially by September 2029.

The contract marks the start of the second phase of QatarEnergy’s LNG ship acquisition program.

Under the first phase, QatarEnergy contracted 60 LNG carriers at South Korea’s three shipbuilders HHI, Samsung Heavy, and Hanwha Ocean, and China’s Hudong-Zhonghua.

The firm also signed multiple time charter parties with various shipowners during 2022 for the first phase of the program.

This 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 previously 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, it said.

More orders

QatarEnergy expects the number of contracted vessels to grow to more than 100 LNG carriers in the future.

Besides HD Hyundai, QatarEnergy is expected to order more vessels at Samsung Heavy, Hanwha Ocean, and Hudong-Zhonghua by the end of this year.

The second phase could include the construction of up to 40 ships but the total number of vessels remains unclear, according to shipbuilding sources.

QatarEnergy is still in talks with Hanwha Ocean and SHI for the second phase of the shipbuilding program.

LNG Prime understands that the biggest issue in these negotiations is the price of the LNG carriers.

Looking at the price of the HHI LNG tankers, a single vessel is worth about $229.5 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.

Besides these 174,000-cbm vessels, QatarEnergy is also planning to order Q-Max LNG carriers at yards in South Korea and China, sources previously said.

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