Shipbuilders awaiting Qatar's decision on its planned berth reservations for up to 80 LNG carrier newbuildings maintain that an announcement will be made this month, despite the Middle East producer’s plans to delay the start-up of its new liquefaction trains.

Yards involved in the process had been told that Qatargas and its associates would move to put a “deed of agreement” (DOA) in place on the newbuilding berths this month.

Ramadan deadline

TradeWinds understands that under the original plans the DOA was to be inked before the start of Ramadan on 22 April.

Shipbuilders are waiting to hear if this will go ahead as planned.

“Officially, there is no news,” one said, hinting that he now expects the DOA could be pushed back by several months, at least until after the end of Ramadan on 23 May.

But another said he does not expect the recent comments on the delays to the start of production for the first four new trains to have any effect on the slot reservation process.

This week, Reuters reported Qatar Petroleum chief executive Saad Sherida Al-Kaabi as saying Qatar was not scaling back its plans to build six new LNG trains that will see it boost its production to 126 million tonnes per annum, from 77 mtpa.

But Al-Kaabi said it would be postponing the first phase of new production by three to six months, pushing it into 2025 from its original planned kick-off in 2024.

He said the pushback is due to a delay in the commercial bidding process, with contractors asking for more time due to the coronavirus challenges to make their offers on the first four trains of the North Field expansion project.

The first four trains will raise Qatar’s LNG production to 110 mtpa.

Full steam ahead

Al-Kaabi said there would be no delay on the additional two trains for the second phase, which are scheduled to be operational by 2027.

In February, Qatar Petroleum said it was delaying its decision on choosing international partners for the project.

“We are moving full steam ahead with the North Field expansion. There is absolutely no hesitation on that,” Al-Kaabi told Reuters. “I think the world still needs this gas ... with the cancellation of a lot of projects and companies reducing capital expenditure left and right due to the situation.”

Shipbuilders were already hungry for newbuilding orders before the onset of the Covid-19 outbreak. Qatar’s vast LNG newbuilding plan had been one of the key pieces of business that they have been banking on to shore up their rapidly emptying orderbooks.

Deliveries from 2023

Qatargas came out with its requirement for 40 firm LNG carriers and a similar number of optional vessels last year, with deliveries slated across a four-year period from 2023.

South Korea’s Hyundai Heavy Industries, DSME and Samsung Heavy Industries, alongside China's Hudong-Zhonghua Shipbuilding (Group), submitted final offers on the vessels in February.

Separately, some 32 shipowners have expressed an interest in the newbuildings, but this bidding process appears to have stalled.

Aside from the North Field expansion, Qatar has said it needs the newbuildings to lift cargoes from Qatar Petroleum and ExxonMobil’s Golden Pass LNG project in the US, and to replace some of the smaller and older vessels it is using.

The LNG market is awash with product and gas prices are at an all-time low. While developers are focused on long-term demand and so need to invest in new projects now, several have delayed investments as the coronavirus fallout creates fresh uncertainty.