HD Korea Shipbuilding & Offshore Engineering Vice Chairman Ka Sam-hyun, left, and Qatari Minister of State for Energy Affairs Saad Sherida Al-Kaabi sign an agreement in Seoul, Sept. 27, for QatarEnergy to place an order for the construction of 17 liquefied natural gas (LNG) carriers to the Korean shipbuilder. Courtesy of QatarEnergy
Korean shipbuilders are expected to win more bids than Chinese competitors for forthcoming orders from Qatar for the second phase of the Middle Eastern country’s liquefied natural gas (LNG) carrier acquisition project, according to industry officials, Tuesday.
The second phase of the project is intended for Qatar to acquire an additional 40 LNG carriers collectively worth around $10 billion.
Last Wednesday, HD Hyundai Heavy Industries, a subsidiary of HD Korea Shipbuilding & Offshore Engineering (KSOE), stepped closer to becoming the first shipbuilder to win an order for the second phase of the project, by signing an agreement with QatarEnergy for the construction of 17 LNG carriers.
“The deal, valued at 14.2 billion Qatari riyals ($3.9 billion), marks the start of the second phase of QatarEnergy’s LNG ship acquisition program,” the Middle Eastern country’s state-owned oil and gas firm said in a press release.
Hanwha Ocean and Samsung Heavy Industries are also reportedly in price talks with Qatar.
When Qatar placed orders for 65 vessels collectively worth $14 billion for the first phase of the project last year, Hanwha Ocean received an order for 19 ships, while Samsung Heavy Industries was asked for 18 ships and HD KSOE 17 ships.
An order for the remaining 11 vessels was given to China’s Hudong-Zhonghua Shipbuilding.
There is speculation that Qatar may place more orders with Chinese shipbuilders this time, given that China’s state-run energy firms signed long-term contracts to import LNG from the Middle Eastern country.
In addition, data compiled by Clarksons Research showed that 58 percent of global orders during the first eight months of this year were given to Chinese shipyards, while 27 percent went to Korean shipyards.
However, Samsung Securities analyst Han Young-soo advised investors not to worry too much about the growth of Chinese shipbuilders in the LNG carrier market.
“When leading players have enough building slots, clients prefer placing orders for LNG carriers with companies that have proven abilities,” the analyst said.
The government has also supported domestic shipbuilders, as Minister of Trade, Industry and Energy Bang Moon-kyu and Minister of Land, Infrastructure and Transport Won Hee-ryong met with Qatar’s Minister of State for Energy Affairs Saad Sherida Al-Kaabi, who visited Seoul last week.
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