On March 4, Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering announced that it has signed a memorandum of agreement (MOA) for 12 liquefied natural gas (LNG) carriers with a Middle Eastern shipping company.
Although Hanwha Ocean has not yet disclosed the shipowner’s information, according to industry sources, the order is likely to come from QatarEnergy, the state-owned energy company of Qatar. The price and delivery date of the order are not yet known.
At present, Hanwha Ocean is carefully reviewing the main contract and the relevant information will be publicly disclosed once the details are finalized. At the end of last month, it was announced that Hanwha Ocean and QatarEnergy were in the final stages of negotiation and expected to formally sign a contract by the end of March this year.
Based on the agreements signed, the total value of Hanwha Ocean’s order for 12 new shipbuildings is approximately $2.76 billion (RMB 19.869 billion), with reference to HD Hyundai Heavy Industries’ and Samsung Heavy Industries’ previous unit shipbuilding costs of approximately $230 million per ship. According to the slot reservation agreement signed in 2020, Hanwha Ocean has 14 reserved slots, a difference of 2 slots from the number of MOA that have been made public so far.
In addition to the long-delayed large order will be confirmed , Hanwha Ocean also finally after two years to achieve annual net profit turnaround.
Hanwha Ocean’s operating income for 2023 was KRW 7.408 trillion, up 52.4 % year-on-year. The operating loss of 196.5 billion won was significantly reduced from the loss of 1.6136 trillion won in the same period last year. The net profit of 160 billion won is a sharp reversal of last year’s net profit loss of 1.74 trillion won and a turnaround of annual net profit after two years.
Hanwha Ocean said the earnings growth was attributed to the increase in shipbuilding volume and the higher proportion of LNG carriers. In the future, Hanwha Ocean will also continue to expand the scale of volume construction of LNG carriers.
It is understood that in 2023, QatarEnergy initially planned to order a cumulative total of 40 vessels from HD Korea Shipbuilding & Offshore Engineering (HD KSOE), Samsung Heavy Industries and Hanwha Ocean. The latest data show that if Hanwha Ocean formally signed the contract, the three major shipbuilding enterprises will be cumulative order 44 ships.
On October 26, 2023, HD KSOE announced the signing of contract with QatarEnergy for the construction of 17 174,000 m3 LNG carriers, with an order value of approximately KRW 5.2511 trillion (~US$3.9 billion), and an individual vessel cost of approximately US$230 million.
On February 6, 2024, Samsung Heavy Industries announced that it has officially signed a construction contract with a Middle East shipowner for 15 17.4 million cubic meters LNG carriers, with a total order value of about KRW 4.5716 trillion (~US$3.47 billion), and a single-vessel cost of about US$ 230 million. Although the shipyard did not publicize the owner behind this big order or other details. But based on industry sources and information such as the cost of a single vessel, the owner behind the order is QatarEnergy.
In addition to placing orders with Korean shipyards, QatarEnergy has signed an agreement with Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation, for the construction of eight 271,000 m3 Q-Max ultra-large LNG carriers, which are expected to be delivered in the period 2028-2029. The Q-Max LNG carriers, which will primarily serve QatarEnergy’s long term deals related to the North Field Expansion Project, will be used for transactions including those with Chinese customers.
The order was finalized at the end of last year, and the price has not yet been made public, but it is believed that the cost of a new shipbuilding could exceed $300 million, which would make Hudong-Zhonghua’s order for eight new units worth more than $2.4 billion.
In order to accelerate the energy transition and respond to Qatar’s LNG development strategy, Qatar’s LNG giant Qatargas has been renamed QatarEnergy LNG, and currently operates 14 LNG production lines in Ras Laffan, with an annual production capacity of about 77 million tons, according to the report.
Qatar, as the world’s largest exporter of liquefied natural gas (LNG), has the largest single gas field in the world in the North Field. QatarEnergy is significantly increasing LNG production from the North Field, with the first phase of the expansion project (2025) increasing capacity from 77 million tons to 110 million tons per year, and the second phase (2027) to 126 million tons, with a project scale of up to $40 billion.
