Qatar Places First South Korean LNG Orders in Expansion Program
QatarEnergy has begun to move forward with its plans to build out its shipping fleet to support the expansion of its LNG operations. The recently rebranded state energy company placed the first of six orders with two South Korean shipyards as part of its multi-year agreement which was signed in 2020 was billed as the world’s largest shipbuilding contract.
QatarEnergy placed what it referred to as “the first batch of orders,” with the South Korean shipbuilders. No details were provided on the size of the vessels or delivery dates. Four will be built by Daewoo Shipbuilding & Marine Engineering (DSME). The other two vessels will be built by Samsung Heavy Industries (SHI). They said additional orders would follow.
In announcing the orders, His Excellency Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, as well as the President and CEO of QatarEnergy, noted their history with the two Korean shipbuilders. DSME and SHI have built 23 Q-Flex and 14 Q-Max LNG vessels for Qatar in the past as part of its previous LNG expansion project.
In June 2020, Qatar reserved what it estimated as 60 percent of the global capacity for the construction of LNG carriers. The agreement calls for more than 100 vessels to be built by 2027. Hyundai Heavy Industries is also part of the overall agreement although it did not receive any orders in these first contracts.
“These orders, and those that will follow in the near future, constitute a significant part of our program to expand Qatar’s LNG fleet to meet the requirements of our LNG expansion projects, our existing fleet replacement, as well as our LNG trading arm,” said His Excellency Minister Al-Kaabi.
Last month, Qatar also announced its first-ever order for LNG carriers to be built in China. The order valued at $770 million is for four LNG carriers to be built by China State Shipbuilding Company's Hudong-Zhonghua Shipbuilding.
With global demand for LNG soaring, Qatar is seeking to become the global leader in the market. First discovered in 1971, what is today referred to as the North Field is believed to be the largest LNG deposit yet identified. It holds 10 percent of the known global reserve for LNG in a field measuring over 2,000 square miles.
Qatar announced plans to build four new liquefaction trains at its North Field project due to come online by 2027. This will boost annual output from the current 77 million tons to 126 million tons pr year. An additional two trains are also reported to be in the planning stages.
QatarEnergy’s LNG carrier fleet program is designed to meet the shipping requirements of the LNG expansion projects, as well as replace part of Qatar's existing LNG fleet.