LNG

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. 

China’s Dalian Shipbuilding Industry Co. (DSIC) said the world’s first LNG-powered very large crude carrier, the “Yuan Rui Yang”, would soon be ready to hand over to Cosco Shipping Energy Transportation after completing its gas trials following successful sea trials and LNG bunkering during the fourth quarter.

ABB, the Swiss-Swedish power systems company, said its turbocharging unit had won a contract to equip parts of the new propulsion systems for six liquefied natural gas carrier newbuilds ordered by four companies.

ABB Turbocharging will deliver its A200-L turbocharger brand for the engines of the vessels.

The Zurich-based company said its low-pressure, dual-fuel engine offered environmental benefits at reduced capital cost.

Its A200-L turbochargers will be used on the engines being supplied by MAN Energy Solutions, the Denmark-based subsidiary of the German engine-maker.

The MAN 5G70ME-C10.5-GA engines will be installed in six 174,000 cubic metres capacity LNG carriers ordered by four different shipowners, Korea Line Corp. and PAN Ocean of South Korea, Knutsen OAS of Norway and JP Morgan, the US-based bank and investment firm.

The newbuilds will be the subject of long-term charter agreements with Royal Dutch Shell.

Offerings

ABB pointed out that the ME-GA is MAN’s first low-pressure, dual-fuel, two-stroke engine and sits alongside MAN’s well-established high-pressure M-Type Electronically Controlled-Gas Injection (ME-GI) engines.

The ME-GA, according to ABB and MAN, offers LNG carriers and other vessels an alternative way to cut greenhouse-gas emissions and minimize air pollution.

“Turbocharger performance is particularly important for dual-fuel engines. High turbocharging efficiency ensures that a high air-fuel ratio is maintained during high-load operations,” said ABB Turbocharging.

“The A100/A200-L series is ABB’s most advanced single-stage turbocharger technology for two-stroke engines, using the latest thermodynamic and aerodynamic expertise to pack the highest pressure ratios and efficiency currently available into a compact unit,” it added.

ABB explained that the small footprint also translated into a lower cost of ownership as spare parts are smaller and more economical and the turbocharger itself is easier to handle for servicing.

“When engine designers and makers want reliable high performance to support new engine technologies, they look to ABB turbochargers,” said Alexandros Karamitsos, Head of Global Sales Low-Speed Turbochargers, ABB.

“I am confident that shipowners will increasingly value our combination of technology leadership and global service coverage as incoming emission regulations encourage them to explore new fuels and engine concepts,” stated Karamitsos.

Russian natural gas company Novatek, the nation’s largest liquefied natural gas developer in the Arctic region, has also been building up the customer base of its small-scale Cryogas-Vysotsk plant on the Baltic Coast while making progress on assembling a shipping fleet for the Arctic LNG II project under construction on the Gydan Peninsula of northern Siberia.

Gaztransport and Technigaz, the French designer of liquefied natural gas maritime and onshore storage systems, has reived an order from the Korean shipyard Daewoo Shipbuilding and Marine Engineering for equipping six ARC-7 ice-breaking LNG carriers after receiving previous orders in October from a Russian shipyard.

The Asian shipbuilding industry is heading for even tighter competition for orders to build vessels such as LNG carriers, oil tankers and container ships as two of the largest Chinese shipbuilding companies are examining a merger plan at the same time as two of the biggest South Korean shipyard operators are also advancing with a merger proposal.

South Korean shipbuilders are maintaining their dominance in the liquefied natural gas carrier construction sector in the face of some competition from yards in China and Japan.