Middle East producer QatarEnergy has been finalising its talks with shipbuilders on its next tranche of more than 40 LNG carrier newbuildings worth more than $9bn that it plans to firm up for Phase 2 of its huge ship-acquisition project.
Key representatives handling the business were due in London this week to complete discussions with yards after earlier visits to South Korea’s top three shipbuilders.
Market players have indicated that discussions have taken place on raising the price of Qatari vessels.
This would likely mark a second price rise for the ships.
When QatarEnergy first reserved the slots in 2020, LNG newbuilding prices were well below $200m. Prolonged discussions saw levels raised to around $215m per vessel for the ships contracted in 2022. But now this level sits painfully for yards against the $260m-plus they are asking for LNG newbuildings today.
Brokers have detailed that currently Samsung Heavy Industries is holding 16 pre-reserved berths for the Qatari business, Daewoo Shipbuilding & Marine Engineering 12, Hyundai Heavy Industries 10.
There is talk that a further six to eight berths have been secured in China, where Hudong-Zhonghua Shipbuilding (Group) has been the recipient of Phase 1 orders. But it is unclear which yard might build these vessels, as Hudong-Zhonghua’s LNG orderbook already stretches into 2008.
QatarEnergy is expected to turn its attention to the shipowners that it will select to build these next newbuildings against the long-term charters it is offering.
Sources detailed that owners received initial requests for expressions of interest in March.
They are now awaiting the issue of the full tender package on the next tranche of newbuildings.
Initial timetabling suggested that this is due to arrive during the second quarter of this year, possibly by the end of this month.
QatarEnergy, which is using Qatargas to progress the tender, has indicated that commercial bids will be invited in the third quarter of this year.
Final awards where shipowners are married up with yards are expected in the third or fourth quarters of this year.
There has been considerable market speculation about how QatarEnergy might approach its choice of owners on this second approach to the market.
Qatari LNG shipowning giant Nakilat was noticeable by its absence from the line up of 14 owners, some of them working in consortia, for the 66 LNG newbuildings firmed up for QatarEnergy charters in 2022.
Some suggest Nakilat may be earmarked to take on some of the vessels in this second phase of ordering.
Others said QatarEnergy has already reached out to those shipowners who signed up to LNG newbuildings and charters in its first phase to ascertain if they want to extend their positions with more ships.
In March, TradeWinds reported that QatarEnergy is also weighing up whether to upsize some of its reserved slots to an updated version of its 263,000-cbm to 265,000-cbm Q-Max vessels. To date, the orders have been for 174,000-cbm ships.
The company is understood to have asked shipbuilders for design proposals. But yards are said to be reluctant as the larger ships will absorb more dry-dock space in what is an already tight market for LNG carrier berths.
|Shipyard||Reserved berths (including options)||Shipowners||No. of vessels|
|Daewoo Shipbuilding & Marine Engineering:||45||K3 - H-Line Shipping, Pan Ocean and SK Shipping||11|
|TMS Cardiff Gas||2|
|Hyundai Heavy Industries||45||Knutsen||10|
|MISC, NYK, K Line and China LNG Shipping (Holdings)||7|
|Samsung Heavy Industries||45||JP Morgan||12|
|K3 - H-Line Shipping, Pan Ocean and SK Shipping||6|
|Hudong-Zhonghua (Shipbuilding) Group||16||MOL-Cosco||7|