S.Korea's shipbuilders near $9.4 bn in LNG carrier orders from Qatar

South Korea's top three shipbuilders -- HD Hyundai Heavy Industries Co., Hanwha Ocean Co. and Samsung Heavy Industries -- as early as September will conclude a massive deal to build liquefied natural gas (LNG) carriers in Qatar worth as much as 12 trillion won ($9.4 billion). 

This is expected to be the first large-scale order for Hanwha Ocean after its absorption into Hanwha Group.

Industry sources on Wednesday said shipping companies getting orders from Qatar Gas, a subsidiary of the public oil company Qatar Energy, plan to sign contracts between September and October with the three shipbuilders to build about 40 LNG carriers. 

Samsung is expected to receive the most orders with 16, followed by Hanwha Ocean with 14 and HD Hyundai with 10 ships. The shipbuilders are in last-minute talks with the shipping companies on details such as contract amount and construction conditions.

“The three shipbuilders cleared out their docks in advance to build LNG carriers from the second half of the year,” an industry source said.

This is the second such deal with Qatar following the first signed in 2021, which comprised 54 orders.  Though the price range was set when the DOA was signed in 2020, the value of the second contract is expected to exceed that of the first, which stipulated an average vessel price of $215 million, under the condition of reflecting changes in labor and raw material costs.

The London-based shipping industry observer Clarkson Research said the cost of a new LNG carrier of 174,000 cubic meters last month was $260 million (330 billion won).  Calculated at $250 million per vessel, the LNG carrier order from Qatar that the three shipbuilders are expected to conclude in the second half of the year is an estimated 12 trillion won.

For Hanwha Ocean, this is its first large-scale order after its takeover by Hanwha Group.

“Hanwha Ocean sells through selective orders focused on LNG carriers, which have inherent advantages over methanol-propelled ships,” a company source said.

South Korean shipbuilders are thus expected to continue their order rally in LNG carriers in the second half of the year, led by an upcoming battle for 15-20 LNG carriers from the African country of Mozambique, which has huge gas fields.

Write to Hyung-Kyu Kim at khk@hankyung.com