Qatar Signs $20B Shipbuilding Deal with Korean Firms

Qatar Signs $20B Shipbuilding Deal with Korean Firms

On 1 June 2020, Qatar Petroleum (QP) said that it has signed agreements with South Korea’s “Big 3” shipyards to secure more than 100 ships costing more than 70 billion Qatari riyals (approximately $19.3bn).

Qatar has entered into agreements with Daewoo Shipbuilding & Marine Engineering Co., Hyundai Heavy Industries Co. and Samsung Heavy Industries Co, according to a statement from state producer Qatar Petroleum. The three Korea-based firms will reserve a “major portion” of their liquefied natural gas (LNG) ship-construction capacity for QP through 2027.

The deal was described by QP’s chief executive as the largest LNG shipbuilding programme in QP’s 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,” said Saad al-Kaabi, QP’s chief executive and Qatar’s energy minister.

Exploration work in the expanded North Field mega project showed confirmed gas reserves there exceed 1,760 trillion cubic feet, al-Kaabi said in November 2019.

“We are moving full steam ahead with the North Field expansion projects,” he added.

“The 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.”

QP signed a separate agreement to secure shipbuilding capacity with Hudong-Zhonghua Shipbuilding Group Co., a wholly owned subsidiary of China State Shipbuilding Corp., in April 2020.

Qatar needs a bigger fleet of LNG carriers because of new projects in Qatar and the US.

Qatar is “moving full steam ahead” with the expansion of the North Field, its share of the world’s biggest gas deposit, al-Kaabi said. That will raise the country’s annual output from 77 million tons to 126 million tons by 2027, he said.

By MPC Journal Team

Middle East Politics and Culture Journal is an independent platform that provides reports and news on political affairs, security and defence, counterterrorism, and culture in the Middle East and North Africa.