Middle East producer QatarEnergy has reached an agreement with South Korean shipbuilder Hanwha Ocean for its next batch of LNG carrier berths under Phase 2 of its colossal newbuilding project and is in fresh talks in China for additional supersize ships.
Those working closely on the project said QatarEnergy has privately declared its 12 pre-reserved slots for 174,000-cbm LNG carriers at Hanwha Ocean.
One indicated that if price negotiations continue to “go well” another one or two LNG carriers could be added to the Hanwha Ocean tally for Phase 2.
Another told TradeWinds that Hanwha Ocean is expected to sign up formally for the berths “within March”.
The upcoming business is set to follow QatarEnergy’s 17-vessel LNG carrier deal inked with HD Hyundai Heavy Industries in September 2023 and the Qatari giant’s 15-ship agreement, which it signed with Samsung Heavy Industries last week.
Combined, this would give QatarEnergy at least 44 LNG berths at South Korean yards plus eight Q-Max vessels in China totalling 52 under its Phase 2 project, with more potentially in the pipeline.
But the agreements on the berths with the South Korean shipbuilders have been mired in wranglings over the price of the vessels, sources said.
Under its original slot reservations with South Korean shipbuilders in June 2020, QatarEnergy’s interests set aside up to 45 LNG carrier berths at each of the big three yards — HHI, SHI and the then Daewoo Shipbuilding & Marine Engineering, now Hanwha Ocean.
During that period, LNG carrier newbuildings were priced within the range of $186m to $190m per vessel. But levels were climbing across all ship sectors and Qatar’s declarations on its berths were held up as price negotiations with South Korean shipbuilders intensified.
Eventually, prices of around the $215m mark were agreed on the 60 ships QatarEnergy said it contracted under Phase 1 of its huge newbuilding project at a time when levels for LNG carriers had climbed to around the $230m mark.
In Phase 2 of the project, which kicked off in 2022, pricing has again proved an issue in South Korea.
Currently, LNG carrier pricing is sitting stubbornly at around the $260m-per-vessel mark, with few available berths remaining for 2027 and the bulk of available delivery slots now pushed into 2028 — in part due to Qatar’s massive moves on LNG newbuildings.
The vessels agreed with HHI were widely reported to have been concluded at around $230m per ship.
Pricing pushback
Sources told TradeWinds that SHI pushed back on the pricing, citing significant disparities from current market levels. But top-level ministerial talks ensued between Qatar and South Korea and the shipbuilder eventually agreed on a deal on its 15 ships at a similar $230m price point to HHI.
Over the weekend, QatarEnergy announced that its compatriot shipowner Nakilat would be taking on the ownership of 25 of the Phase 2 vessels, without specifying the shipyards that will build these vessels.
Other owners are due to be married up with the declared slots against time charters with QatarEnergy.
Under Phase 2, QatarEnergy has also signed up to eight Q-Max-sized LNG carriers, to be built at Hudong-Zhonghua Shipbuilding (Group) in China, extending LNG delivery positions at the yard into 2029.
TradeWinds has learned that QatarEnergy, which has signed long-term LNG supply contracts with China, is now in new talks with the Chinese yard about contracting additional Q-Max vessels.
At one point, the Qatari giant asked shipbuilders to quote on providing slots for 16 Q-Max vessels. But South Korean yards have not proved keen as the behemoths take up valuable dock space.
