Qatar’s state-run energy group Qatar Petroleum has issued an invitation to tender for what will become the largest LNG carrier newbuilding program in history to support the expansion of its North Field Expansion (NFE) Project.
As well as covering the NFE project, which will significantly increase the company’s LNG production capacity, the tender also covers shipping requirements for the LNG volumes that will be purchased and offtaken by Ocean LNG, a joint venture between Qatar Petroleum (70%) and ExxonMobil (30%), from the Golden Pass LNG export project in the United States. It also includes options for replacement requirements for Qatar’s existing LNG fleet.
According to Saad Sherida Al-Kaabi, Qatar’s minister of state for energy affairs and the president and CEO of Qatar Petroleum, the major LNG shipbuilding campaign is expected to initially deliver 60 LNG carriers to support the planned production expansion, with a potential to exceed 100 new LNG carriers over the next decade.
Qatar Petroleum confirmed the massive newbuilding plan in February and the company has recently toured yards in China, Japan and South Korea ahead of proceeding with this giant order, which is likely to include more 210,000 cu m Q-Flexes and 266,000 cu m Q-Maxes.
The last time Qatar ordered a large volume of ships, between 2004 and 2007, South Korea’s major three yards won all the contracts. This time around the Chinese are expected to bargain hard for business, having recently developed a record-breaking 270,000 cu m LNG carrier design.
“This tender, along with the recently released engineering, procurement and construction tender for four new mega LNG trains planned as part of the North Field Expansion Project, constitute two monumental and historical milestones as we make major strides in our commitment towards the further development of the world’s largest non-associated gas field,” Al-Kaabi said.
Qatar Petroleum has entrusted Qatargas to execute the newbuilding program on its behalf. Qatar Gas Transport (Nakilat) is the largest owner of LNG carriers in the world, with a fleet comprising of 65 LNG carriers.
Last month, Nakilat and John Angelicoussis’ Maran Gas formed a joint venture to own four 173,400 cu m LNG carriers currently under construction in South Korea.
The promising outlook for the LNG shipping market has boosted the LNG carrier newbuilding market. VesselsValue data shows that a total of 101 LNG carriers have been ordered since January 2018, compared to just 17 in 2017. Spot rates for LNG carriers have also increased by more than 100% compared to levels in 2017.