QatarEnergy embarks on round two of huge LNG carrier newbuilding plan

Middle East producer QatarEnergy is set to restart its discussions with South Korean shipbuilders this week as it embarks on phase II of its huge LNG carrier newbuilding programme for up to 151 vessels.

Representatives from QatarEnergy are scheduled to visit Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering to discuss the remaining berth slots they have under reservation at the three shipyards.

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Discussions with one or possibly two Chinese yards may follow.

Industry sources following the project suggest the Qatari giant could move on between 30 and 40 LNG newbuildings at South Korea’s big three shipbuilders this year for vessels that will deliver from 2027 onwards.

These would come on top of the 66 LNG carriers that QatarEnergy secured across the three yards and China’s Hudong-Zhonghua Shipbuilding (Group) in 2022 when it linked up 14 owners, either individually or in consortia, to its raft of pre-reserved slots.

Further newbuilding phases under QatarEnergy’s original five-year agreements signed in 2020 with the four yards cannot be ruled out.

For this second phase, Qatari shipowning giant Nakilat is expected to scoop some of the newbuilding slots, one project watcher said. The Doha-listed company, which controls 69 LNG carriers, won no ships in the first tranche of vessels.

It is thought unlikely that QatarEnergy will be able to secure any further slots with its Chinese partner — Hudong-Zhonghua — after booking 12 ships at the yard in 2022 and with the shipbuilder’s orderbook now extending out to 2028.

There is also the added confusion that QatarEnergy works closely with its liquefaction partner — US energy major ExxonMobil. In 2022, the Qatari company was seen donating its LNG berths to the major — which has its own LNG reserved slots at SHI — and could do so again this year rather than risk losing slots.

Project watchers in South Korea said QatarEnergy’s team wants to revise some of the specifications on their newbuildings — which were drawn up before 2020 — to ensure the best efficiencies on the vessels.

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But this would likely provoke fresh price negotiations with shipyards.

The original plans for the LNG carrier orders were held up in 2022 as newbuilding prices started rising.

QatarEnergy was forced to renegotiate its per-vessel price from a sub-$200m figure upwards to around $215m.

But brokers said this still compared very favourably to LNG carrier newbuilding prices, which quickly climbed to more than $250m during the year and appear to be holding strong at this level.

Shipbuilders do have the upper hand, newbuilding brokers say.

QatarEnergy needs to confirm its outstanding reserved LNG slots this year or risk losing the berths.

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There is also an array of independent owners and liquefaction project developers competing for any spare LNG slots with delivery dates in 2026.

Shipbuilders said there is now “almost nothing” remaining for 2026 delivery dates, although brokers expect a few positions to emerge, particularly with the slippage on potential handovers for the 17 vessels split between HHI and SHI for the Mozambique LNG project.

Yards have said they will start to market 2027 positions this year but with these, for deliveries that are five years out, they have been slow to make a move on them against a backdrop of sharply rising subcontractor prices.