With HD Hyundai Heavy Industries (HHI) having won a contract to build 17 carriers for the second phase of Qatar Energy’s liquefied natural gas (LNG) carrier project which is said to be worth up to US$12 trillion, much attention is being paid to how big orders Hanwha Ocean and Samsung Heavy Industries will receive in the future.
According to industry sources on Oct. 26, Qatar Energy will implement the second phase of its 12-trillion-won LNG carrier project in the second half of this year. In the first batch, a total of 65 vessels were ordered, of which 53 were won by the Korean shipbuilding industry and 11 by Chinese shipbuilders.
The second batch of orders is for 40 174,000-cubic-meter vessels. Although the number of ships may be 25 fewer than the 65 ships in the first project, the total order amount is expected to reach US$10 billion due to a recent surge in demand for LNG carriers and ship price hikes.
HD Hyundai Heavy Industries (HHI) has the edge in the second batch of orders. On Oct. 27, HD HHI signed a memorandum of agreement (MOA) with Qatar Energy for the construction of 17 LNG carriers, and sealed the deal on the occasion of President Yoon Suk-yeol’s state visit to Qatar. This is seven more vessels than the ten which Qatar Energy previously promised to give the Korean shipbuilder.
At the time of the signing of the MOA with HD HHI, Qatar Energy announced that its additional contracts with Korean shipbuilders such as Hanwha Ocean and Samsung Heavy Industries were imminent and that the size of the second batch may rise to 40-plus vessels from the initially announced 40.
Now that HD HHI has finalized the contract for 17 LNG carriers, the focus has shifted to how many LNG carriers will be ordered from Hanwha Ocean and Samsung Heavy Industries. This ordering scenario can unfold into two stories, many experts say.
The first is based on the assumption that Korean companies take all of Qatar Energy’s second batch of LNG carrier orders. In this case, Hanwha Ocean and Samsung Heavy Industries will compete for at least 23 vessels.
The second is that some of Qatar Energy’s LNG carrier orders will go to Chinese companies. With at least seven or eight vessels down from 23, Korean companies will have to compete more fiercely and may end up with a number of orders that is below expectations.
However, if the number of orders increases to 40 or more, Korean companies will be able to attain their initial order targets, some experts say. As Hanwha Ocean and Samsung Heavy Industries already signed slot contracts for 14 and 16 vessels with Qatar Energy, the two are expected to land orders for similar numbers of ships.
Currently, Hanwha Ocean and Samsung Heavy Industries are in price negotiations with Qatar Energy for LNG carriers. Industry insiders believe that a main contract on the second batch of the order for LNG carriers between Qatar Energy and Korean shipbuilders can be finalized as early as November.