Energy has been among the key pillars of Qatar and South Korea’s diplomatic ties.
South Korean shipbuilders have reportedly been in talks with QatarEnergy for a $3.3 billion deal to construct additional liquified natural gas (LNG) tankers.
HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE) along with Samsung Heavy Industries Co. and Hanwha Ocean Co. have been engaging in discussions with the energy giant since June, to supply a total of 10 LNG carriers, as per industry sources in Seoul on Monday.
The state-run company has reportedly requested the South Korean shipyards to build Q-Max LNG carriers with a capacity of 270,000 cubic metres. This is bigger than the standard 174,000-cubic-metre vessels.
The Q-Max tankers are of higher prices due to their larger capacity.”Q” stands for Qatar and “Max” for the maximum size ship able to dock at the Gulf country’s LNG terminals.
Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corp. (CSSC), agreed to supply QatarEnergy with 18 Q-Max carriers for a total of $6 billion, with each unit priced at $330 million, earlier this year.
Should QatarEnergy proceed with the South Korean shipbuilders at similar rates, the total value of the contracts could reach $3.3 billion, industry insiders detailed.
“We will decide whether or not to sign a deal after reviewing vessel prices and profitability,” commented a representative from Samsung Heavy, noting the company’s prior experience in manufacturing Q-Max tankers.
Meanwhile, South Korea is among the Asian countries that hold long-term fixed contracts for LNG with Qatar. The Gulf state is among the top three LNG exporters alongside Australia and the United States.
Last September, South Korea’s HD Hyundai Heavy Industries signed a $3.9 billion ship-building contract with QatarEnergy to build 17 LNG carriers.
The deal marked the beginning of the second phase of the Qatari state-owned company’s LNG ship acquisition programme, the largest of its kind in the industry’s history.
The project is designed to massively ramp up Qatar’s LNG production.
In 2020, QatarEnergy, formerly Qatar Petroleum, entered Ship Slot Reservation Agreements with three Korean shipyards, Samsung Heavy Industries, Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering.
Energy has been among the key pillars of Qatar and South Korea’s diplomatic ties. Qatar and Saudi Arabia account for 38 percent of South Korea’s crude oil imports and 21 percent for its gas imports, per figures shared by Yonhap last year.
Qatar is moving towards dominating global LNG production with its multi-billion North Field Expansion project, the biggest of its kind in the industry.
The project is split into the North Field East (NFE), North Field South (NFS) and North Field West.
NFE is set to ramp up Qatar’s LNG production from 77 to 110 mtpa (metric tonnes per annum) by 2025, as the NFS will increase the production capacity from 110 to 126 mtpa by 2026.
