QatarEnergy has celebrated a South Korean steel-cutting of the first of its new generation of chartered liquefied natural gas carriers that will transport output from two LNG expansions and with most of the newbuilds booked for shipyards in South Korea.
QatarEnergy said it was joined by Samsung Heavy Industries and US investment bank JP Morgan Asset Management in a special ceremony on Geoje Island in Korea to mark the official launching of QatarEnergy’s LNG fleet expansion project.
The Doha-based company said the shipyard event signified an extension of QatarEnergy's “international collaborations and commitment to global partnerships” and follows the October 2022 steel-cutting at Hudong-Zhonghua, the Chinese shipyard to where a far smaller part of the shipbuilding contract was awarded.
The Korean ceremony was held before executives of companies involved in the project including Sheikh Khalid bin Khalifa Al-Thani, the Chief Executive of Qatargas who attended on behalf of Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and who is also President and CEO of QatarEnergy.
Samsung was represented by Jin-Taek Jung, the CEO of SHI, and Andy Dacy, the CEO of JP Morgan's Global Transport Group, an owner of LNG carriers to support its commodities business.
Slot reservations
The steel-cutting ceremony in South Korea followed QatarEnergy's 2020 decision to enter into Ship Slot Reservation Agreements with three Korean shipyards: SHI, Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering.
Subsequently, in 2022, QatarEnergy signed multiple time-charter parties with various shipowners, including the shipping unit of JP Morgan Asset Management, a fund investing in a wide array of energy transportation assets.
Qatar has two expansion projects, the North Field East (NFE) joint venture and the North Field South (NFS) venture. When both are completed Qatar's production will surge to 126 MTPA from the current 77 MTPA.
The carrier fleet expansion programme is being conducted alongside and about 80 LNG vessels are being built, including the replacement of older ships in the current Qatari fleet.
The surge in LNG newbuilds for Qatar and other proejcts will take the global fleet in several years to more than 800 vessels.
The main South Korean shipbuilders won all the first big round of Qatari orders so that the vessels are ready for the start-up of the first production expansion project, the North Field East venture.
China newbuilds
Qatar has also ordered at least half a dozen new LNG carriers from the Hudong-Zhonghua Shipbuilding Group of Shanghai for the Ras Laffan expansion’s cargo transportation.
While QatarEnergy's partners in the LNG production expansions are primarily US and European energy majors, China Petroleum and Chemical Corp., the Chinese major known as Sinopec, also agreed in April 2023 to take a stake in the NFE expansion.
Sinopec had already signed a cargo supply deal with QatarEnergy in November 2022 to receive 4 MTPA of Qatari cargoes from 2026.
With a total investment of $28.75 billion, the NFE project will increase Qatar's annual LNG export volumes in the first instance from 77 MTPA to 110 MTPA.
Sinopec signed an equity participation agreement with QatarEnergy to take 1.25 percent of the shares in the NFE joint venture.
