On 6 February, South Korean shipbuilder Samsung Heavy Industries announced on its official website that it has signed a KRW 4.5716 trillion ( about $3.47 billion/about RMB 24.957 billion) contract with a Middle East shipowner for fifteen 170,4000 ㎥ LNG carriers to be delivered by October 2028.
This is the largest contract ever signed by Samsung Heavy Industries, refreshing the company’s July 2023 order for 16 16,000 TEU methanol dual-fuel-powered container ships valued at KRW 3.9593 trillion (about $3.13 billion at the time). The container ships were ordered by Taiwan, China’s Evergreen Marine and are scheduled to be delivered by December 2027 in succession.
Samsung Heavy Industries has yet to disclose the shipowner or other further details. However, according to Yonhap News Agency and other South Korean medias, the order is likely to come from Qatar Energy, the state-owned energy company of Qatar.
Now, Qatar Energy is moving forward with the second phase of the “Hundred Ships Programme” for large LNG carriers. Early in mid-January this year, it was announced that Samsung Heavy Industries had signed a shipbuilding contract with Qatar Energy for 15 LNG carriers. According to the ship slot reservation agreement signed in 2020, Samsung Heavy Industries’ reserved size is 16 ships, which is similar to the number of ships it has reserved.
Together with the latest order, Samsung Heavy Industries has taken orders for 17 new ships worth US$3.7 billion so far this year, which is almost half of Samsung Heavy Industries’ total orders last year. The order includes 15 LNG carriers and two very large liquid ammonia carriers (VLACs) by ship type.
In 2023, Samsung Heavy Industries has taken a total of 29 new ship orders (seats) worth US$8.3 billion, achieving 87% of its annual order intake target of US$9.5 billion. Earlier this year, Samsung Heavy Industries said it would not disclose its annual order target for 2024.
Since the second half of 2023, Samsung Heavy Industries has been negotiating with Qatar Energy for the second phase of the 100 Ship Programme. In November 2023, the two sides disclosed that the agreement was for six units, with a cost of about $220 million per unit. If the above order is confirmed to be related to Qatar Energy, it means that the final order size of Samsung Heavy Industries has doubled, and the second phase of Qatar Energy’s “Hundred Ships Programme” order quantity may exceed the original plan of 40 ships.
It is understood that Qatar Energy officially started the second phase of the “Hundred Ships Program” in 2023, and first signed a contract with HD Hyundai on 26 October 2023 for the construction of 17 LNG carriers, with an order value of about 5.2511 trillion won (about $3.9 billion at that time), and a single-vessel cost of about $230 million, which to be built by HD Hyundai Heavy Industries.
So far, among the three major Korean shipbuilding companies, only Hanwha Ocean has not yet announced the second phase of the ” Hundred Ships Programme ” order. According to the ship slot reservation agreement signed in 2020, Hanwha Ocean has 14 reserved ship slots. If Hanwha Ocean’s order is placed on schedule, Qatar Energy’s second phase of the “Hundred Ships Programme” will result in the ordering of nearly 50 new ships in Korean shipyards alone.
So far, Samsung Heavy Industries’ handheld order book for LNG carriers has exceeded 90 units, which is expected to have a positive impact on its future performance. On this basis, the company will further strengthen its profit-centred order selection strategy.
In addition to placing orders with South Korean shipyards, Qatar Energy has signed an agreement with Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation, for the construction of eight 271,000 cbm Q-Max ultra-large LNG carriers, which are expected to be delivered between 2028 and 2029. It is understood that the order was finalised at the end of last year, the price has not yet been made public, but it was revealed that the cost of a single ship may exceed $300 million, if this is the benchmark, the value for eight new ships will be more than $2.4 billion.
