Qatar inks $70 billion in shipyard deals for new LNG fleet

Dubai — Qatar Petroleum has major signed deals with three Korean shipyards to reserve LNG vessel construction capacity required for its North Field Expansion project and Golden Pass LNG projects.

Under the agreements, Daewoo Shipbuilding & Marine Engineering (DSME), Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI) will reserve a major portion of their LNG ship construction capacity for Qatar Petroleum through 2027. The deals are worth $70 billion, the company said in a statement.

With the signing, QP has secured about 60% of the global LNG shipbuilding capacity through 2027 to cater for its LNG carrier fleet requirements in the next seven to eight years, which could reach more than 100 new vessels, the company said.

"We are moving full steam ahead with the North Field expansion projects," said Minister of State for Energy Affairs Saad Sherida Al-Kaabi, the CEO of Qatar Petroleum.

"With the conclusion of these milestones agreements, we have everything in place to commence the largest LNG shipbuilding program in history."

LNG top spot

The North Field project, announced in September 2018, will see state-owned Qatar Petroleum's LNG production increase to 110 mt/year from 77.5 mt/yr via the construction of four new trains, which will be brought online in six-month intervals.

A second phase of the project, announced in November, plans to boost QP's LNG production capacity by an additional 16 mt/yr to 126 mt/yr by the end of 2027, representing an overall increase of 64%.

Should it all go ahead, Qatar will reclaim its mantle as the world's top LNG exporter from Australia, which overtook the Persian Gulf state at the end of last year.

Phase 1 has been delayed by the coronavirus pandemic hindering the bidding process for potential partners. The project timeline has been pushed back by up to six months so that it will now enter production in 2025.

Qatar has short-listed several international oil majors to be awarded a collective 30% share of the first phase, including Chevron, Eni, Shell and Total.

Golden Pass, meanwhile, is a $10 billion LNG export terminal project based in Texas, which is being developed to produce around 16 mt/yr of LNG by 2024. It is a joint venture, with Qatar Petroleum owning 70% of the project, while ExxonMobil owns 30%.