Korean shipbuilders have hit the jackpot in Qatar, securing a deal worth $19.2 billion to build more than 100 liquefied natural gas (LNG) carriers, the largest LNG ship contract in history.
Qatar Petroleum, a state-owned petroleum company of Qatar, announced on Tuesday (02 June 2020, KST) on its webpage that it has ordered over 100 LNG ships from Hyundai Heavy Industries (HHI), Daewoo Shipbuilding and Marine Engineering (DSME) and Samsung Heavy Industries (SHI). The company didn’t reveal how many ship orders it allocated to each shipbuilder.
The petroleum company said the ship construction order is to meet the company’s future LNG fleet requirements. Qatar Petroleum has been working on improving LNG production capacity at the North Field, the world’s largest gas field located offshore of Qatar.
Under its plan, the company will raise its LNG production capacity from 77 million tons a year to 110 million tons a year until 2025 and 126 million tons by 2027.
“The signing of today’s agreements with the three esteemed Korean companies reflects our commitment to the North Field expansion projects,” Saad Al-Kaabi, energy minister of Qatar, said during a contract ceremony.
“We are moving full steam ahead with the North Field expansion projects to raise Qatar’s LNG production capacity from 77 million today to 126 million tons per annum by 2027 to ensure the reliable supply of additional clean energy to the world at a time when investments to meet these requirements are most needed. These agreements will ensure our ability to meet our future LNG fleet requirements to support our expanding LNG production capacity and long-term fleet replacement requirements,” the minister added.
Trade Minister Sung Yun-mo said the signing was made possible by “the long-standing mutual trust between Korea and Qatar” despite the recent economic difficulties sparked by the COVID-19 pandemic.
When Qatar Petroleum ordered 16 LNG carriers from China’s China State Shipbuilding Corporation, worth $3 billion, in April, there had been concern about the future of Korean shipbuilders’ leading status.
At a time when shipbuilders are struggling with decreased orders due to the impact from the COVID-19 pandemic, industry analysts said the megadeal from Qatar is a welcoming one as Korean shipbuilders can consolidate their leading status in the LNG tank ship sector. In 2019, the three shipbuilders won more than 90 percent of the world’s LNG carrier orders.
Given French energy firm Total and Russia’s Yamal are reportedly preparing to order LNG carriers to be used in Mozambique and Russia, respectively, they added Korean shipbuilders, which have shown globally recognized technological excellence, are expected to win additional ship construction orders.