QatarEnergy and Samsung Heavy Industries enter into an agreement for 15 giant LNG carriers

South Korean shipbuilder Samsung Heavy Industries has signed a contract with QatarEnergy, for the construction of 15 174,000 m3 liquefied natural gas (LNG) carriers, reported the Korean media. According to the ship reservation agreement signed in 2020, Samsung Heavy Industries has a reservation size of 16 ships, which is similar to its reservation.

Since the second half of 2023, Samsung Heavy Industries has been negotiating with QatarEnergy for the second phase of the ” Hundred Ship Program”. In November 2023, the two sides revealed that the agreement was for six ships, with a cost of about 300 billion won (about $220 million) per ship, but now, Samsung Heavy Industries has doubled the number of orders. This also means that the second phase of QatarEnergy’s ” Hundred Ships Program” order scale may be more than the original plan of 40 ships.

On October 26, 2023, Korea Shipbuilding & Offshore Engineering Co., Ltd.(HD KSOE) announced that it has signed a contract with QatarEnergy for the construction of 17 174,000 m3 LNG carriers. The order is valued at around KRW 5.2511 trillion (approx. US$3.9 billion), with a single-vessel cost of around US$230 million, which is 13.6% lower than the latest shipbuilding price published by Clarkson (US$265 million). The order is the largest single contract order in the Korean shipbuilding industry so far.

It is understood that the second phase of QatarEnergy’s “Hundred Ships Program” was originally planned to be announced by the end of 2023. Due to HD KSOE took the order at a lower price, Samsung Heavy Industries and Hanwha Ocean seem to no longer have the advantage of negotiating price, talks have reached a stalemate. Nonetheless, Samsung Heavy Industries and Hanwha Ocean had previously requested QatarEnergy to increase the ship price.

Until now, Hanwha Ocean is the only one of the three major Korean shipbuilding companies that has not yet announced a shipbuilding contract for the second phase of the “Hundred Ships Program”. Hanwha Ocean has 14 slots reserved under a slot reservation agreement signed in 2020. If the order is placed on schedule in Hanwha Ocean, QatarEnergy’s second phase of the ” Hundred Ships Program” will have ordered nearly 50 new ships in Korean shipyards.

In addition to placing orders with Korean shipyards, QatarEnergy has signed an agreement with Hudong Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation, for the construction of eight 271,000 m3 Q-Max ultra-large LNG carriers, which are expected to be delivered between 2028 and 2029. The Q-Max LNG carriers are part of QatarEnergy’s Hundred Ships program and will primarily serve long-term deals related to QatarEnergy’s North Gas Field Expansion Project, including deals with Chinese customers.

The order was finalized last month (at the end of last year) and the price has not yet been made public, but it has been revealed that the cost of a single ship could be more than $300 million, which would make Hudong Zhonghua’s order for eight new ships worth more than $2.4 billion.

In order to accelerate the energy transition and in response to the future vision and strategy of Qatar’s LNG industry, Qatar’s LNG giant Qatargas has been renamed QatarEnergy LNG, and currently operates 14 LNG production lines at Ras Laffan, with an annual production capacity is about 77 million tons.

Yangzijiang Shipbuilding

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