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QatarEnergy inks multi-billion riyal milestone LNG ship-building agreement with Hyundai Heavy Industries

The Gulf state also holds long-term fixed LNG supply contracts with several Asian customers, including South Korea, who make up the majority of its exports.

Korea’s Hyundai Heavy Industries (HHI) bagged a QAR 14.2 billion deal with QatarEnergy for the construction of 17 liquified natural gas (LNG) ships, the Qatari entity announced on Wednesday.

The signing of the mega deal took place during the visit of QatarEnergy CEO Saad Sherida Al-Kaabi to Seoul, where he met with a number of officials including the ministers of energy, oceans and fisheries, and transportation.

The deal marks the beginning of the second phase of the Qatari state-owned company’s LNG ship acquisition programme, the largest of its kind in the industry’s history. The project is designed to massively ramp up Qatar’s LNG production.

“This is another milestone in our long-term relationship with HD Hyundai Heavy Industries and the Korean shipbuilding industry in general, which is built on the strong and strategic partnership between the State of Qatar and the Republic of Korea,” Al-Kaabi said, as quoted by a QatarEnergy press release.

QatarEnergy signed contracts for 60 other LNG ships during the first phase of its historic programme, which also aims at supporting the growing gas production capacity for the multi-billion dollar North Field expansion and the Golden Pass projects.

With the new agreement, QatarEnergy has now secured a total of 77 LNG ships.

“These 17 LNG carriers will be built by HD Hyundai Heavy Industries to the highest technical and environmental standards and specifications. Further, the vessels are designed to achieve optimal fuel efficiency and significant reduction in carbon emissions,” Al-Kaabi added, referring to the latest deal.

In 2020, QatarEnergy, formerly Qatar Petroleum, entered Ship Slot Reservation Agreements with three Korean shipyards—Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Shipbuilding and Marine Engineering.

The latest signing comes after reports in June pointed to new deals between the Gulf energy giant and three of South Korea’s top shipbuilders, including HHI, Hanwha Ocean, and Samsung Heavy Industries.

During the same month, QatarEnergy witnessed the steel cutting of its first new generation LNG vessel in South Korea, an event that marked a new milestone in the fleet expansion project.

The ceremony was held on Geoje Island alongside Samsung Heavy Industries and JP Morgan Asset Management.

The Gulf state also holds long-term fixed LNG supply contracts with several Asian customers— Japan, China, India and South Korea—who make up the majority of its exports.

Qatar’s gas endeavours

Qatar is currently on track to dominate global LNG production through its North Field expansion project, the biggest of its kind in the industry. The project is split into two parts, the North Field East (NFE) and the North Field South (NFS).

NFE is set to ramp up Qatar’s production from 77 to 110 million tonnes per annum as the NFS will increase the production capacity from 110 to 126 million tonnes per annum.

QatarEnergy announced eight international partnership agreements last year for both phases of the projects, set to kick start in 2026 and 2027.

Earlier this week, QatarEnergy’s CEO, also Qatar’s minister of state for energy affairs, said that LNG gas sales from the project are “going very well” and could be sold out by the end of this year.

The minister had stated in May that Qatar aimed to secure all long-term LNG contracts arising from the North Field expansion’s two phases by the end of the current year.