Qatar Petroleum signs the largest LNG shipbuilding agreements in history

Qatar Petroleum (QP) entered into three agreements today to reserve LNG ship construction capacity in the Republic of Korea to be utilized for QP’s future LNG carrier fleet requirements, including those for the ongoing expansion projects in the North Field and in the United States.

Under the agreements, the “Big 3” Korean shipyards - Daewoo Shipbuilding & Marine Engineering (DSME), Hyundai Heavy Industries (HHI), and Samsung Heavy Industries (SHI) - will reserve a major portion of their LNG ship construction capacity for QP through the year 2027.

Qatar Petroleum signs the largest LNG shipbuilding agreements in history to secure more than 100 ships valued in excess of QR 70 billion to cater for its LNG growth plans #QP #QatarPetroleum #Qatar #Korea https://t.co/I14PivYOb4 pic.twitter.com/O0PFNay1YO

— Qatar Petroleum (@qatarpetroleum) June 1, 2020

The agreements were signed by His Excellency Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QP in a virtual signing ceremony attended by His Excellency Mr. Sung Yun-mo, the Minister of Trade, Industry & Energy of the Republic of Korea.

Also attending were Sheikh Khalid Bin Khalifa Al Thani, CEO of Qatargas, the CEOs of the Korean shipyards, senior representatives from Korea’s Ministry of Trade, Industry & Energy, as well as executives from QP, Qatargas, and the three Korean shipyards.

On the Korean side, the agreement with DSME was signed by Mr. Sung Geun Lee, the President, and CEO of DSME, the agreement with HHI was signed by Mr. Sam H. Ka, the President and Board member of HHI, and the agreement with SHI was signed by Mr. Joon Ou Nam, the President, and CEO of SHI.

“The signing of today’s agreements with the three esteemed Korean companies reflects our commitment to the North Field expansion projects, even during these extraordinary times. As I have previously stated, we are moving full steam ahead with the North Field expansion projects to raise Qatar’s LNG production capacity from 77 million today to 126 million tons per annum by 2027 to ensure the reliable supply of additional clean energy to the world at a time when investments to meet these requirements are most needed. These agreements will ensure our ability to meet our future LNG fleet requirements to support our expanding LNG production capacity and long-term fleet replacement requirements,” His Excellency Minister Al-Kaabi said during the signing ceremony.

“With the conclusion of these milestones’ agreements, we have everything in place to commence the largest LNG shipbuilding program in history. We have secured approximately 60% of the global LNG shipbuilding capacity through 2027 to cater for our LNG carrier fleet requirements in the next 7-8 years, which could reach 100+ new vessels with a program value in excess of 70 billion Qatari Riyals,” His Excellency Minister Al-Kaabi added.

In addition, His Excellency Minister Al-Kaabi highlighted Korea’s position as a key and strategic energy partner with the State of Qatar and thanked His Excellency Minister Sung Yun-mo and the Korean companies for their role in supporting the strong Qatar-Korean business relations and hoped that this milestone will take the relationship with Korean business partners to greater and wider horizons.

His Excellency Minister Al-Kaabi said, “The new LNG vessels will be equipped with the latest generation slow speed dual-fuel engines, utilizing LNG as a fuel. This will ensure the most efficient performance and compliance with the latest global emission and environmental regulations. We will continue working on reducing emissions from our fleet to protect the regional and global environment in line with the environmental objectives of the Qatar National Vision 2030.”

Delivering his congratulations on the signing ceremony, His Excellency Minister Sung Yun-mo said, “Despite the recent difficulties facing the international community, today’s signing was made possible by the long-standing mutual trust between Korea and Qatar as well as the outstanding risk management capability of His Excellency Minister Al-Kaabi.”

His Excellency Minister Sung Yun-mo also expressed his commitment to enhancing economic cooperation with Qatar by adding, “I will not spare any effort to further strengthen our bilateral cooperation in energy and shipbuilding, as well as diversify our cooperation across various fields including ICT, healthcare, plant construction and more.“ 

Also speaking at the virtual signing ceremony, Mr. Sung Geun Lee, the President, and CEO of Daewoo Shipbuilding & Marine Engineering said, "I would like to express our sincere appreciation to Qatar Petroleum for choosing DSME as a partner for this historic Mega LNG project in Qatar. I have no doubt that Qatar will reinforce its position as the world’s leading LNG exporter through this great project. As the world’s first-class shipbuilding and maritime specialists, DSME is delighted to contribute to this project with our cutting-edge LNG technologies together with our eco-friendly and smart ship expertise. In the same manner as a decade ago for the previous Qatar project, we will soon invite you to witness our production in person at our advanced Okpo shipyard."

Mr. Sam H. Ka, the President and Board member of Hyundai Heavy Industries, said, “We are very proud and excited to work with Qatar Petroleum for this unprecedented, and the world’s largest, LNG project. It is our firm belief that this project will enhance Qatar’s global reputation as the World’s Premier LNG Supplier and effectively contribute to the increasing global market demand for cleaner energy of the future. To this end, we will join forces with Qatar Petroleum and Qatargas with the highest standards of excellence for the successful construction and delivery of vessels that are more efficient and eco-friendlier than ever.”

Mr. Joon Ou Nam, the President, and CEO of Samsung Heavy Industries said, “I am deeply grateful for the signing of this agreement between Qatar Petroleum and Samsung Heavy Industries. SHI promises to deliver the best quality LNG carriers with on-time delivery. Particularly, we will build the best LNG carriers for Qatar Petroleum in terms of efficiency, reliability, and HSE through the technology and workmanship developed within our company. I hope that today's event will provide momentum to further strengthen our cooperative economic relationship between Qatar and Korea.” 

Qatar Petroleum’s LNG carrier fleet program is the largest of its kind in the history of the LNG industry and will play a pivotal role in meeting the shipping requirements of Qatar Petroleum’s local and international LNG projects, as well as replacing part of Qatar's existing LNG fleet.

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