Qatar Petroleum has invited tenders for the construction of more than 100 LNG ships to meet the requirements of the expansion of Qatargas LNG liquefaction project and the Golden Pass LNG project in the US.
Although this prospective order is massive in size, it will have minimal impact on short-term charter rates. Continuing with the historical trends, the Qatargas orders are expected to be backed by long-term charter contracts from LNG liquefaction projects where Qatar Petroleum has invested. However, if new orders are confirmed, LNG shipbuilding slots will become limited, in turn, pushing newbuilding prices, Drewry’s report reads.
Drewry expects the South Korean shipyards to benefit the most from these massive LNG orders. Qatargas has timed the tender to perfection to take advantage of lower newbuilding prices and adequate shipyard capacity. While newbuild prices have inched up a little over the last six months, they are still low when compared with newbuild prices in 2015. With sparse orders in the last three years, shipyards have ample capacity to take big LNG orders in Drewry’s view.
The consultancy believes most of Qatar’s LNG ship orders will go to Korean shipyards as the country has previously used all three major Korean shipyards – Daewoo, Samsung and Hyundai – for building similar ships. However, Drewry expects these orders to be staggered, as Qatar Petroleum has indicated that the company expects to order the 100 new LNG ships over the next decade.