Page 9 - GLNG Week 22

GLNG COMMENTARY GLNG

QP reserves South Korean

LNG shipbuilding capacity

in $19bn megadeal

Qatar Petroleum has agreed to reserve LNG shipbuilding capacity

with three South Korean shipbuilders in an order worth $19bn as the
company pushes on with its gas expansion plans

PIPELINES & QATAR Petroleum (QP) announced this week have cause to worry about their survival as
TRANSPORT that it had entered into three agreements with orders fell owing to difficult market conditions.
shipbuilders in South Korea to secure a major According to market forecasts cited by a Daishin
WHAT: proportion of their LNG shipbuilding capacity Securities analyst, Lee Dong-heon, a 30% drop
QP has placed an order up to 2027. The order covers over 100 ships and in orders had been expected this year compared
worth $19bn with South is valued in excess of $19bn, making it the larg- with 2019. Instead, Lee estimated that the three
Korea’s three largest est deal of its kind. It follows a smaller – but still shipyards may now have an order backlog of
shipbuilders. significant – deal that QP announced in April to around 18 months.
reserve LNG shipyard capacity in China. “This is the largest single LNG vessel order in
WHY: The Middle Eastern company said this week history. We have never seen so many LNG ves-
The company is that Qatar had now secured 60% of the world’s sels ordered in the same year, let alone by a single
expanding its LNG LNG shipbuilding capacity – illustrating the buyer,” a Credit Suisse analyst, Saul Kavonic, was
export capacity even scale of its ambitions as it sets about expanding quoted by Reuters as saying.
as competitors put its gas production and liquefaction capacity. QP did not reveal details of how the order
the brakes on new Indeed, QP’s LNG carrier fleet programme is the is split between the three shipyards. How-
liquefaction capacity. largest ever to be undertaken in the history of the ever, Samsung Heavy was cited by Reuters
LNG industry. as saying it expects to sign deals covering the
WHAT NEXT: 2020-24 period. Neither Hyundai nor Daewoo
Qatar’s LNG carrier Big spender commented on the matter.
fleet programme is the QP’s latest agreements were struck with Daewoo The order follows a similar but smaller
largest of its kind and Shipbuilding & Marine Engineering, Hyundai announcement in April, when QP said it had
will replace part of the Heavy Industries and Samsung Heavy Industries agreed with Hudong-Zhonghua Shipbuilding
country’s existing fleet. – known as South Korea’s Big Three shipyards. Group, a subsidiary of China State Shipbuilding,
Analysts said the deal had come at the right to reserve LNG as a “significant” proportion of its
time for the shipyards, which would otherwise ship construction capacity. That deal is valued at

Week 22 05•June•2020 www. NEWSBASE .com P9