Page 4 - DMEA Week 22

DMEA COMMENTARY DMEA

QP reserves South Korean

LNG shipbuilding capacity

in $19bn megadeal

QP 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

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

P4 www. NEWSBASE .com Week 22 04•June•2020