MOL Signs First Agreements in Qatar’s LNG Carrier Newbuild Program
QatarEnergy announced a long-term charter agreement with Japan’s Mitsui O.S.K Lines (MOL) for four newbuild LNG carriers as it begins moving forward with its planned construction program that could see as many as 100 LNG carriers built. Two years ago, the state-owned energy company announced that it had reserved shipbuilding slots in China and South Korea to support its efforts to nearly double annual LNG production and exports by 2027. In October 2021, QatarEnergy announced the four vessels now in the MOL charter agreement would be built in China.
“These contracts mark the start of the construction phase of QatarEnergy’s historic fleet expansion program in support of our LNG expansion projects,” said Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and the President and CEO of QatarEnergy. “We are pleased to be working with our reliable business partners from China and Japan, namely MOL, Hudong, and CSSC, to take this important step together.”
The signing of the first LNG ship-owner contract with MOL marks the conclusion of the ship-owner invitation to tender that was launched by QatarEnergy in March 2021. The energy company invited proposals from a large group of LNG ship owners for the chartering of LNG carriers. According to the Qatari officials, other ship-owners have been selected by QatarEnergy as part of the process and will be announced in the future.
The shipbuilding program to support the massive LNG expansion project began in April 2020 when Qatar agreed with Hudong-Zhonghua Shipbuilding Group, a subsidiary of China State Shipbuilding Corporation (CSSC), to reserve LNG ship construction capacity in China. Hudong built the first Chinese-made LNG carrier, the Dapeng Sun, in 2008, and in October 2021 Qatar announced that they would build the first four ships in their new program. Concurrent with the signing of the charter agreements, shipbuilding contracts were signed between MOL and Hudong for the construction of the four new LNG carriers.
Separately, in June 2020, Qatar entered into agreements with three of South Korea’s major shipbuilders, Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries, and Samsung Heavy Industries reserving building slots for the LNG program. At the time, it was called the largest ever shipbuilding order representing 60 percent of the global shipbuilding capacity for LNG carriers through 2027.
The world’s leading shipping companies were invited in March 2021 to submit proposals to QatarEnergy to operate the planned newbuilds. It was called an opportunity to bid on portions of the largest charter agreement in the history of the industry. In addition to shipping from Qatar, the tender package also covered the requirements for the LNG volumes that will be produced from the Golden Pass LNG export project in the United States. It also included options to replace time charters for some of Qatar's LNG carriers that will expire in the next few years.
All of this is being done to support Qatar’s ongoing expansion projects for the output of LNG. Efforts at the North Fields site in Qatar are projected to increase production capacity from 77 million tons per annum today to 126 million tons annually by 2027.