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Over 1.8 billion US dollars! Han Hua Ocean receives orders for 8 LNG ships from Qatar


On March 26th, South Korea's Hanhua Ocean (formerly Daewoo Shipbuilding) announced that the company signed a construction contract with shipowners in Oceania on March 24th for eight 174000 cubic meter LNG transport ships, with a total contract amount of 2439.3 billion Korean won (approximately 1.826 billion US dollars).

These 8 LNG ships are part of the 12 LNG ships that Qatar Energy plans to order from Hanhua Ocean, and also part of the second batch of Qatar's "100 Ships Plan". On March 4th, Han Hua Ocean signed a Memorandum of Agreement (MOA) with the shipowner for 12 LNG ships. It is expected that the remaining four ships will also sign formal construction contracts in the near future. At this point, the second batch of orders for Qatar's "Hundred Ships Plan" has been mostly confirmed.

The single ship cost of these 8 LNG ships is about 229.9 million US dollars, which is consistent with the second batch of 17 LNG ship orders under the Qatar "100 Ship Plan" undertaken by HD South Korea Shipbuilding Marine in October last year, and the second batch of 15 174000 cubic meter LNG ship orders under the Qatar "100 Ship Plan" undertaken by Samsung Heavy Industry in February this year. It is slightly lower than the previously expected price of 240 million US dollars per ship in the South Korean industry and far below the current LNG ship market price of about 265 million US dollars.

These 8 LNG ships will be built at Hanhua Ocean's Yupu Shipyard in Juji City and are scheduled to be delivered gradually before January 31, 2028.

Sources say that the second batch of orders for the "100 ship plan" between Qatar Energy and the three major South Korean shipping companies has been postponed until now, with the main difference being the ship price. In previous negotiations with Samsung Heavy Industries, they requested that Qatar increase pricing on the grounds of a significant price difference from the current market. However, Qatar subsequently held high-level ministerial talks with South Korea, and ultimately Samsung Heavy Industries had to agree to sign an order for 15 new ships for $229 million.

It is understood that in 2020, when Qatar Energy and three South Korean shipping companies signed a berth booking agreement, the price of each LNG ship was set at $190 million, which is the same as the price in 2019. Due to the sharp rise in raw material prices, when both parties signed the first batch of related orders for the Qatar LNG project in 2020, the single ship cost had already increased to about 215 million US dollars, a 13% increase from the original contract price. At that time, the price of newly built LNG ships had already risen to the $240 million range. Since then, the prices of LNG ships have continued to rise, and as of now, the market cost of LNG ships has risen to 265 million US dollars.

Qatar is the world's largest producer and exporter of LNG. Currently, Qatar is fully promoting the expansion project of the northern oil field, with plans to increase its LNG production capacity from the current 77 million tons to 126 million tons per year after 2027. In order to meet the gas field expansion plan, Qatar Energy Company also needs to expand its LNG fleet, so it has launched the "100 Ship Plan" and signed agreements with four Chinese and South Korean shipping companies. The preliminary plan is to order a total of 151 LNG ships in three stages.

In 2020, Qatar Energy Company signed a Memorandum of Understanding (MOA) for the construction of LNG ships with three major shipping companies in China, namely Shanghai East China and South Korea. According to the plan, the three major shipping companies in South Korea will each build 45 LNG ships, totaling 135. In 2022, the first batch of orders for 60 ships under the "Hundred Ships Plan" came into effect, and the three major South Korean shipbuilding companies won a total of 48 ships, including HD Korea Shipbuilding Ocean 17 ships, Samsung Heavy Industries 18 ships, Hanhua Ocean (formerly Daewoo Shipbuilding) 13 ships, and Shanghai East China 12 ships.

Along with the second batch of 44 ships from the three major South Korean shipping companies and at least 8 Q-Max ships from Shanghai East China, Qatar Energy's LNG ship order quantity will reach 112.

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