Qatar Petroleum is keeping its choices open on the final specifications and timing of its colossal $18.8bn order plan to build more than 100 LNG carriers at South Korean shipyards.
TradeWinds understands the berth reservation deal, which was sealed during a virtual signing ceremony this week by the state-controlled Qatari producer, breaks down as 45 LNG carrier newbuildings at each of South Korea’s big three shipbuilders.
The slots at DSME, Hyundai Heavy Industries and Samsung Heavy Industries are spread over a four-year period from the end of 2023 to 2027.
Sources said under the signed deed of agreement (DOA), the intention is that the first orders will be firmed up this year, but suggested this could slip into 2021. The first delivery is pencilled in for the fourth quarter of 2023.
They said yards submitted several cases to Qatar based on the ships’ sizes, propulsion and containment systems, but the final call on these has yet to be made.
Those following the business in South Korea said they expect Qatar to land the bulk of its orders on ships in the standard size range of 174,000 cbm to 175,000 cbm. They are to be fitted with either ME-GI or X-DF engines, depending on which yard is constructing them.
During the signing, Qatar's Minister of State for Energy Affairs Saad Sherida Al-Kaabi, who is also Qatar Petroleum president and chief executive, said the newbuildings would be fitted with slow-speed engines that can use LNG.
The dual-fuel newbuildings are expected to be built with NO 96 or Mark III membrane containment systems, again dependent on the shipbuilder, with Qatar not expected to opt for anything above a standard design choice.
Qatar Petroleum said its orders could be worth around QAR 70bn ($18.8bn) but, without giving an exact figure on the number of newbuildings, it is difficult to put a price on the vessels.
Yard officials are working under exceptionally strict confidentiality terms and are reluctant to discuss details of the project.
Their associates said the price on the ships has been described as “very cheap”. But with the delivery dates so far out, they speculate that Qatar may either call for best offers as it moves to declare different batches of newbuildings, or use some form of pricing formula in the contracts.
Newbuilding brokers said up to 12 ships each per year is within the capability of each yard.
One commented that in the current quiet market and with such advanced delivery dates, Qatar Petroleum’s signing is unlikely to have much effect on yard capacity for other business. “It’s just a show,” one South Korean industry player commented on this week’s ceremony.
But brokers said it will help cash flow and sales targets at the three large yards and make this year feel more active.
Qatar Petroleum signed a similar DOA with China's Hudong-Zhonghua Shipbuilding (Group) in April for eight firm 175,000-cbm LNG carrier newbuildings, plus a similar number of optional slots for delivery in 2024 and 2025. These ships are priced at around $180m each.
Qatar is pursuing the huge haul of LNG carriers for its North Field Expansion project, exports from Golden Pass LNG in the US and fleet-renewal purposes.
