Korea’s “Big Three” shipyards’ capacity reservation pact with QP
Qatar Petroleum(QP) has signed agreements for building its massive liquefied natural gas(LNG) carriers worth approximately $19 billion with Korean major shipyards to secure so-called construction slots, which is expected to lead to obtaining more than 100 LNG carriers soon. However, the exact number of carriers ordered per shipbuilder has not been revealed by QP nor the three major shipyards yet.
With the agreements, Korea’s three largest shipbuilders – Korea Shipbuilding & Offshore Engineering. (KSOE)-formerly Hyundai Heavy Industries-, Samsung Heavy Industries(SHI), and Daewoo Shipbuilding & Marine Engineering(DSME) will reserve a large portion of their LNG ship construction capacity for Qatar Petroleum(a state-owned public corporation) until 2027.
Secure more than 100 ships to cater for Qatar’s North Field Expansion project
It is the largest shipbuilding agreement of its kind in history. This was made by Qatar Petroleum’s President and CEO in virtual signing, which was attended by Sung Yun-mo, the Minister of Trade, Industry & Energy, and Al-Kaabi, the Minister of State for Energy Affairs as well.
Minister Al-Kaabi said, “The signing of today’s agreements with the three esteemed Korean companies reflects our commitment to the North Field expansion project, even during these extraordinary times.” He added, “We have secured approximately 60% of the global LNG shipbuilding capacity through 2027 to cater for our LNG career fleet requirements in the next 7-8 years.”
The North Field Expansion(NFE) is a project which increases Qatar’s LNG production capacity from 77 million tonnes per annum to 110Mtpa, which accounts for an LNG production capacity increase of approximately 43%.
Korea’s cutting-edge LNG technology helps boost Korea’s ailing shipbuilding industry
Considering the mega-sized deal is perfectly made at the bleak time when Korean shipbuilding industry is struggling to survive amid the COVID-19 pandemic and plunging oil price, the three major shipyards will help to boost the feeble shipbuilding industry in Korea and once again proved the world’s best technologies in building LNG carriers to the world.
Whereas some analysts remain skeptical about whether the shipbuilding industry would bounce back to booming cycle in the next few years due to the economic slowdown across the world triggered by the COVID-19 pandemic and growing protectionism on the global market, massive LNG shipbuilding order from QP is expected to play a critical role in the shipbuilding industry as priming water for a V-shaped turnaround.