China makes paly for Qatar's hunt for 80 LNG carriers

China has entered the fray to make a play for newbuildings in exchange for purchasing volumes

Middle East producer Qatar is calling in shipyards for a series of face-to-face meetings about its 80-ship LNG carrier newbuilding programme as it homes in on berth slots.

TradeWinds understands shipbuilders have been going through a written clarification process with LNG producer Qatargas and its associates over the past few months.

Yard representatives are due to head to Doha this month for final clarification sessions on the vessels.

South Korean shipbuilders are widely seen as favoured for the business, with Qatar and top South Korean government officials looking at several proposals.

But sources following the Qatari LNG shipping business said China has been lobbying for its yards and owners to take a share of the vessels.

One said China has put “tremendous pressure” on Qatar to book its newbuildings, in exchange for buying Qatari LNG volumes.

However, Chinese owners are said to be less keen to engage in the project due to concerns over construction quality.

Moving forward

Qatar is expected to push forward with its LNG ship mega-project this year after announcing its intention to shipbuilders and owners in two separate confidential enquiries in 2019.

The tiny Middle East Gulf state has used different figures on the ship haul in each instance, with government ministers initially talking of 100 LNG carriers, an early invitation to yards detailed up to 80 newbuildings and documents issued to shipowners specified 60 vessels.

Yards put in initial offers in June for 40 firm LNG carrier newbuildings, with an option on a similar number of vessels. Qatar wants the newbuildings delivered from 2023 across a four-year period, in batches of 10 vessels per year.

In July, Qatargas approached LNG shipowners asking them to express their interest in building a series of vessels in the 174,000-cbm to 266,000-cbm range against time-charter contracts.

Under Qatargas’ original schedule, shipowners would be prequalified to participate in the process by the end of this month, a formal tender issued in February and time-charter contracts signed before the end of the year.

Qatar needs the LNG carriers to cover the cargoes from its North Field Expansion project. Qatargas initially said this will boost LNG production from 77 million tonnes per annum to 110 mtpa, but in November this figure was raised to 126 mtpa under plans for a further two liquefaction trains.

Ships are also needed for the 16-mtpa Golden Pass LNG development in the US, in which parent company Qatar Petroleum is a shareholder, and to replace older ships in its fleet as they come off hire.