LNG

QatarEnergy, the leading global LNG producer and with three growth projects being developed has signed time-charter party (TCP) agreements with Qatar Gas Transport Co. (Nakilat) for the operation of 25 conventional-size LNG vessels as part of the second shipowner tender under Qatar’s LNG fleet expansion programme.

The agreements were signed in Doha by Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and President and Chief Executive of QatarEnergy and Abdullah Al-Sulaiti, the CEO of Nakilat.

A statement said that 17 of the 25 LNG vessels are being constructed at the Hyundai Heavy Industries (HHI) shipyard in South Korea, while the remaining eight are being constructed at Hanwha Ocean, formerly Daewoo Shipbuilding and Marine Engineering, also in South Korea.

“These agreements firm up last month’s selection of Nakilat as the owner and operator of up to 25 conventional-size LNG carriers, underscoring our continued confidence in Qatar’s flagship LNG shipping and maritime company,” said Al-Kaabi.

“This is a testament to Nakilat’s world-class capabilities as well as to the significant contributions of Qatari listed companies to our country’s national economy,” he explained.

“The agreements we signed today play an important role in implementing QatarEnergy’s historic LNG shipping programme, which will cater for our future requirements, as we move forward with the expansion of our LNG production capacity to 142 million tonnes per annum by 2030,” Al-Kaabi stated.

Each of the 25 vessels will have a capacity of 174,000 cubic metres and will be chartered out by Nakilat to affiliates of QatarEnergy pursuant to the 15-year TCP agreements.

Liquefaction surge

Qatar announced at the end of February 2024 that it was going ahead with a third huge expansion called the North Field West (NFW) project to take overall output to 142 MTPA by the end of the decade.

The NFW joint venture will add to production expansions already under way with the North Field East (NFE) and North Field South (NFS) LNG projects.

The current NFE ramp-up of QatarEnergy’s liquefaction capacity will take production from 77 MTPA to 110 MTPA by 2027.

The second phase, called the NFS venture, will further increase the LNG output capacity from 110 MTPA to 126 MTPA.

The new NFW project will be developed to take production to 142 MTPA.

Overall the three expansions will put into production a total of eight LNG mega-Trains, each with nameplate capacity of around 8 MTPA and total additional nameplate capacity of just over 64 MTPA.

Excelerate Energy, the leading US provider of floating storage and regasification units (FSRUs) with increased demand from Europe and South America, has signed a contract to charter an FSRU to Brazil’s state-owned energy company Petróleo Brasileiro (Petrobras) for 10 years.

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. 

Excelerate Energy, the leading US provider of floating LNG import terminals facing increased global demand in Europe and elsewhere for its services, has extended its credit facilities as activities increase and to finance the purchase of a vessel.

South Korean shipyards outperformed their Chinese counterparts in terms of orders for liquefied natural gas carriers during 2022, though finished second to China in overall shipyard orders.

South Korean LNG shipbuilder, Daewoo Shipbuilding and Marine Engineering (DSME), said it cancelled the last of three LNG carrier orders from 2020 to serve the Yamal LNG export facility in Arctic Russia, operated by natural gas company Novatek.

GasLog, the LNG shipping company with a fleet of 34 carriers in the Group, benefited from the vibrant spot charter market during the third quarter to increase revenues and profits and signed new time charter agreements.

South Korean shipyard Samsung Heavy Industries said it was awarded a contract worth 3.9 trillion South Korean won ($3 billion) to build 14 liquefied natural gas carriers, apparently with 12 of the ships being for Qatar’s expansion project.

SHI declined to say in a regulatory filing whether the bulk of the new orders were related to a potential mega-deal from QatarEnergy after South Korean shipbuilders were asked by the Qataris in 2020 to reserve a major portion of their LNG ship construction capacity.

The shipbuilder received a separate order for two vessels and worth around $430M from an unnamed client in Africa to deliver the two ships by the end of December 2024.

The latest orders brought SHI's total for 2022 to $6.3Bln for 33 ships, including 24 LNG carriers.

With these orders, SHI said it had achieved 72 percent of its annual order target estimated at $8.8Bln for 2022.

SHI’s 12 newbuild carriers, destined to deliver Qatari volumes and which would be Bahamian-flagged, would each have capacity of 174,000 cubic metres.

SHI said this latest order marked the single largest shipbuilding contract and LNG carriers order that a Korean shipyard had been awarded.

In March 2021 the shipyard had obtained a then record order worth $2.48Bln to build 20 containerships with capacities of 15,000 twenty-foot units.

DSME order

Daewoo Shipbuilding and Marine Engineering disclosed on June 8, 2022, that it had received a $850M order for four newbuilds from Qatar.

The LNG carrier orders are increasing to keep pace with LNG and demand liquefaction plant expansion by nations such as Qatar and the US.

DSME, the world's No. 4 shipbuilder by order backlog, said it would build the Qatar project vessels with 174,000 cubic metres of capacity at the Okpo shipyard on the south coast and deliver them by the first half of 2025.

The DSME order was the first result of a $19 billion contract that DSME, SHI and Hyundai Heavy Industries, signed with Qatar to construct scores of LNG vessels through 2027.

The contract is in line with Qatar's plan to boost its LNG production capacity to 126 million tonnes per annum by 2027 in two expansions from the current 77 MTPA.

South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering has won $4 billion in orders so far in 2022, including eight LNG carriers, six containerships, one offshore platform and one depot maintenance order.

DSME added that the six containerships ordered this year have a specification for dual-fuel capability.

The latest DSME orders included three LNG carriers for the Americas after the company previously said there had been two LNG carrier orders worth 521 billion South Korean won ($428M).

The yard has now added one more vessel for the order list from the Americas, taking the total for the region to 863.5Bln Korean won ($710M).

“These LNG ships will be built at the Okpo Shipyard and delivered to the owner by the end of 2025,” said DSME.

GasLog Ltd, the Greek LNG shipping company, has also ordered LNG carrier from DSME in 2022.

GasLog is currently expanding its fleet and has ordered four newbuild 174,000 cubic metres capacity vessels for delivery in 2024 and 2025.

DSME, which is the world’s fourth largest shipbuilder, had an order backlog of $10.86Bln because of increased demand for valued-added vessels, such as LNG carriers and very large containerships with dual-fuel propulsion.

The latest three LNG carrier orders for the Americas will be of 174,000 cubic metres capacity.

The yard added that they would also be equipped with the latest generation M-type Electronically Controlled, Gas Injection (ME-GI) propulsion system.

DSME said it was also fitting a more advanced re-liquefaction system.

“The yard’s other smart energy saving systems, such as the Shaft Generator Motor and their Lubrication System, are representative of eco-friendly new technologies that can improve fuel efficiency and reduce carbon-dioxide and sulfur-oxide emissions,” added the DSME statement.

Daewoo Shipbuilding and Marine Engineering (DSME) of South Korea said it was awarded two combined orders worth 1.84 trillion Korean won ($1.53 billion) to build two LNG carriers for Greek company Maran Gas Maritime under the Angelicoussis Shipping Group and six containerships for another European commercial line.