QatarEnergy and five shipping companies have signed time-charter agreements for 44 newbuild liquefied natural gas (LNG) carriers, raising the number of vessels under QatarEnergy’s LNG fleet expansion program to over a hundred, the state-owned gas major said.
Twenty-five of the 44 ships announced last week will be owned and operated by Qatar Gas Transport Co. Ltd. (Nakilat) after the two Qatari companies consummated an agreement first announced February 10, according to a news release by QatarEnergy.
Being constructed in South Korea, the 25 conventional-size vessels will have a capacity of 174,000 cubic meters (6.1 million cubic feet) each. These will be 100 percent owned by Nakilat and chartered out to QatarEnergy affiliates.
QatarEnergy is an investor in Nakilat, according to information from credit rating agency FitchRatings.
The agreements with the four other companies “cater for the operation of six vessels by CMES LNG Carrier Investment Inc., six vessels by Shandong Marine Energy (Singapore) Pte Ltd., and three vessels by MISC Berhad; all of which are being constructed at Samsung Heavy Industries in South Korea”, QatarEnergy said in a later announcement. “The remaining four vessels will be operated by a joint venture of Kawasaki Kisen Kaisha Ltd. (K-Line) and Hyundai Glovis Co. Ltd. and are being constructed at Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) also in South Korea”.
These 19 vessels will also have a capacity of 6.1 million cubic feet each.
QatarEnergy has since 2022 inked long-term time-charter agreements for LNG ships, planning to grow its LNG fleet to over a hundred. QatarEnergy has now signed time-charter agreements for 104 conventional LNG ships, according to the second announcement.
On February 23 QatarEnergy said it expects to put into operation by September 2024 the first ship to be delivered from the expansion program.
“43 ships out of the 104 will be chartered by QatarEnergy’s affiliate ‘QatarEnergy Trading’, marking it the single largest one-step ship acquisition program of any single entity in the history of the LNG industry, and placing QatarEnergy and consequently QatarEnergy Trading firmly on the road to becoming a leading global LNG trader”, the release stated.
QatarEnergy president and chief executive Saad Sherida Al-Kaabi said in a statement about the latest agreements, “Today’s signings form a significant milestone in QatarEnergy’s LNG fleet expansion program, as it marks the conclusion of the conventional sizes vessels portion of program, bringing the total number of ships for which we have signed TCPs [time-charter party agreements] to 104 vessels, a massive undertaking that is the largest shipbuilding and leasing program ever in the history of the industry”.
“These ships will support our expanded LNG production capacity from the North Field in Qatar and Golden Pass in the U.S., while also meeting our long-term fleet replacement requirements”, added Al-Kaabi, who is also the Gulf state’s energy minister.
The east and south expansions of the offshore North Field will raise Qatar’s LNG production capacity to 126 metric tons per annum (MMtpa) by 2026, according to QatarEnergy. Discovered 1971, the North Field is the largest gas field in the world spanning 2.3 square miles or about half of Qatar’s land area, according to QatarEnergy. It has averaged over 700 million cubic feet per day in gas production, QatarEnergy says on its website.
QatarEnergy announced the start of construction in the North Field expansion projects October 3, 2023.
Meanwhile, expected to come onstream this year, the $10 billion U.S. project in Sabine Pass, Texas, has a planned capacity of 18 MMtpa of LNG according to the implementing joint venture. Exxon Mobil Corp. is the co-venturer.
QatarEnergy has already secured long-term offtake deals for the North Field expansion projects, in a spurt of transactions that followed the energy trade disruption that resulted from Russia’s invasion of Ukraine 2022.
Qatar is among the world’s biggest LNG exporters alongside Australia, Russia and the U.S. It had held the top spot for years until Australia overtook it 2021, when Qatar exported about 3.8 trillion cubic feet according to BP PLC’s 2022 annual statistical review of the energy market.
In the latest offtake agreement bagged by QatarEnergy, Qatar will supply India 7.5 MMtpa of LNG for 20 years under an agreement signed with the South Asian country’s Petronet LNG Ltd., as announced by QatarEnergy February 6, 2024.
On November 4, 2023, QatarEnergy said it signed another offtake deal with China Petrochemical Corp. (Sinopec) for three MMtpa of LNG from the two North Field expansion projects. The agreement increases Sinopec’s purchase commitment to the projects to seven MMtpa following an earlier one signed 2022 between the state-owned companies. Both agreements last 27 years.
In another agreement for supply to China QatarEnergy said June 20, 2023, it agreed to deliver four MMtpa from the East project to state-owned China National Petroleum Corp. over 27 years.
On October 23, 2023, QatarEnergy announced a 27-year agreement with Eni SPA to supply up to one MMtpa from the East project to Italy. Eni is a partner in the East project with a 3.125 percent share.
On October 18, 2023, QatarEnergy announced two agreements with Shell PLC for up to 3.5 MMtpa for 27 years. The supply is meant for the Netherlands and to be sourced from the East project, where the British energy giant holds 6.25 percent ownership. Shell also holds 9.375 percent in the South project.
On October 11, 2023, QatarEnergy bared two agreements to supply TotalEnergies SE with a maximum of 3.5 MMtpa for 27 years, to be sourced from the two expansion projects and for distribution in France. The French energy heavyweight holds a 6.25 percent share in North Field East, planned to produce 32 MMtpa, and 9.375 percent in North Field South, designed with a 16 MMtpa capacity.
QatarEnergy will begin delivery for the LNG supply for France, Italy and the Netherlands 2026, according to QatarEnergy’s announcements of the agreements.
In Asia, besides China and India, QatarEnergy signed June 1, 2023, an agreement to sell about 1.8 MMtpa to Bangladesh with delivery starting 2026. The agreement with Bangladesh Oil, Gas and Mineral Corp. covers 15 years. Qatar already delivers over 3.5 MMtpa of LNG to the South Asian nation, QatarEnergy said at the time.
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