Qatar exports an average of 7.2 million tonnes of oil to Japan each year. The number has dropped below 2 million tonnes since the contract was terminated in December 2021.
The first batch of time-charter contracts (TCPs) awarded under QatarEnergy’s large LNG shipping program were signed with a subsidiary of Mitsui O.S.K Lines (MOL) for the long-term charter and operation of four LNG ships.
A time charter party is a contract in which the shipowner places a fully equipped and manned ship at the disposal of the chartered for a set period of time in exchange for a fee known as ‘hire’ which is paid at predetermined intervals throughout the charter term.
Japan’s MOL and Hudong-Zhonghua Shipbuilding Group (Hudong), a subsidiary of China State Shipbuilding Corporation (CSSC), signed back-to-back liquified natural gas (LNG) carrier shipbuilding contracts for the construction of four new LNG carriers. The deal hopes to serve QatarEnergy’s LNG growth projects and future fleet requirements.
Qatar Energy and MOL have also agreed to charter and operate the four boats on a long-term basis.
“These contracts mark the start of the construction phase of QatarEnergy’s historic fleet expansion program in support of our LNG expansion projects. We are pleased to be working with our reliable business partners from China and Japan, namely MOL, Hudong, and CSSC to take this important step together,” said Saad Al-Kaabi the Minister of State for Energy Affairs, President and CEO of QatarEnergy.
Can Qatar and Japan’s LNG ‘marriage’ survive shifting market dynamics?
The signing of the first LNG ship-owner contract signifies the successful conclusion of QatarEnergy’s ship-owner invitation to tender for the chartering of LNG carriers for its future requirements, which was issued in March 2021 to a large group of LNG ship owners. Other shipowners who have been chosen by QatarEnergy as part of this process will be announced soon.
This marks the beginning of a new chapter between the world’s second-largest LNG buyer and second-largest LNG exporter.
In April 2020, QatarEnergy and Hudong agreed to reserve LNG ship construction capacity in China for QatarEnergy’s future LNG carrier fleet requirements, including for the North Field expansion projects. The contracts signed today kick off the design and construction of Hudong’s first four new LNG carriers, which were announced in October 2021.
Japan is the world’s largest LNG buyer, importing 74,463,881 tonnes in 2020. In 2020, their LNG import dollar value exceeded $30 billion, accounting for approximately 21% of global LNG imports (356 million tonnes).
Qatar, along with Russia, Australia, and Malaysia, is one of Japan’s main LNG suppliers.
Japan receives an average of 7.2 million tonnes of oil per year from the Gulf nation. The number has dropped below 2 million tonnes since the contract was terminated in December 2021.
Last year, Qatar’s North Field project had large contracts with Japanese corporations. The $28.7 billion enlargement project is considered the largest of its kind in the world.
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