Selected shipbuilders this week submitted revised offers to Middle East producer Qatargas on its 80-vessel LNG carrier newbuilding requirement worth more than $15bn.

TradeWinds understands documentation was due in from South Korea’s big three shipbuilders — Hyundai Heavy Industries, DSME and Samsung Heavy Industries — as well as Hudong-Zhonghua Shipbuilding (Group) in China.

Japan’s Kawasaki Heavy Industries had initially expressed interest in participating but is no longer involved in the process.

Alive with speculation

The market is alive with speculation over Qatargas’ preferred size and engine choice for the newbuildings, but sources following the business said the details remain largely unchanged from the producer's original request.

One said Qatargas is increasingly referencing what it describes as its “Q-standard”, which is carriers of 174,000 cbm. But other than ruling out ships of 200,000 cbm, the company is said to be open to other sizes.

Under its initial request, Qatargas, which is operating the process under strict confidentiality terms, asked for offers on 40 firm LNG newbuildings, plus a similar number of optional slots. It called for deliveries to be spread across a four-year period from 2023.

The Qatari giant is expected to formalise an agreement with shipbuilders in the second quarter.

The business has become all consuming for shipbuilders in South Korea, where yards are balancing the chances of winning an allocation of the berths from Qatargas against other upcoming project business, such as Total’s Mozambique LNG and Russia’s Arctic ambitions.

Separately, it has emerged that at least 32 shipowners have expressed an interest in participating in the newbuilding exercise.

Last year, Qatargas followed up its initial approach to yards for berths by sending out a request for expressions of interest to shipowners early in the second half of the year.

Time charters sought

The producing giant is aiming to secure slots at yards and then sign time-charter deals on the vessels with selected shipowners.

Under its original tender, Qatargas said it planned to issue a formal offer to pre-qualified owners this month, requesting time charters on the ships.

Technical and commercial offers would then be due by April, with a view to making a final selection in June, and signing time charters by the end of the year.

Qatargas’ LNG-ship move is rooted in its plan to expand the country’s huge North Field, after lifting a multi-year moratorium on its further development.

Initially, Qatari officials said this will see Qatargas boost its production from a current 77 million tonnes per annum to 110 mtpa by 2024. In November, this was expanded further to 126 mtpa by 2027.

But this week, as global LNG prices slumped, Reuters reported that Qatar had delayed the selection of international partners for the expansion project until the middle of the year, leading market players to speculate that the ship acquisition process could be similarly slowed.

Aside from the expansion of the North Field, Qatar needs the newbuildings to lift cargoes from Ocean LNG, the joint venture of Qatar Petroleum and ExxonMobil behind the US-based Golden Pass LNG project, and to replace some of the smaller and older vessels it is using.

This is the second time Qatar has approached the market for a large haul of ships.

In 2004, it launched a huge LNG newbuilding project that resulted in the construction of the country's 45-vessel Q-Ship fleet, comprising the world’s largest LNG carriers.