QatarEnergy and Nakilat firm up time-charter deal for 25 vessels under ‘historic LNG shipping program’

Qatar’s state-owned energy giant QatarEnergy has signed multi-year time-charter party (TCP) agreements with Qatar Gas Transport Company Limited (Nakilat) for the operation of 25 liquefied natural gas (LNG) vessels as part of its massive shipbuilding deal.

Illustration; Source: QatarEnergy

After the Qatari heavyweight announced in February that Nakilat was selected as the owner and operator of up to 25 conventional-size LNG carriers, the 15-year TCP agreements were formally signed on March 24, 2024. This batch of contracts pertains to the second phase of the company’s LNG fleet expansion program.

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According to the Qatari player, the 25 vessels will have a capacity of 174,000 cubic meters and will be chartered out by Nakilat to affiliates of QatarEnergy. Regarding vessel specifications, the Swiss marine power company WinGD recently expressed hope that the lion’s share of LNG vessels in the second stage would be powered by its X-DF engines, stating that these dual-fuel engines were already the preferred choice to be installed on most vessels.

Following the first round of TCPs signed in April and August 2022, the second phase was kicked off with a $3.9 billion construction contract with Hyundai Heavy Industries (HHI) in September 2023 for 17 of the 25 LNG vessels. They are currently being built at HHI shipyards in South Korea while the remaining eight are being manufactured at the Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) shipyard in the same country.

Commenting on the deal, Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and President and CEO of QatarEnergy, remarked: “These agreements firm up last month’s selection of Nakilat as the owner and operator of up to 25 conventional-size LNG carriers, underscoring our continued confidence in Qatar’s flagship LNG shipping and maritime company. This is a testament to Nakilat’s world-class capabilities as well as to the significant contributions of Qatari listed companies to our country’s national economy.

“The agreements we signed today play an important role in implementing QatarEnergy’s historic LNG shipping program, which will cater for our future requirements, as we move forward with the expansion of our LNG production capacity to 142 million tons per annum by 2030, ensuring additional cleaner and reliable energy supplies to the world.”

QatarEnergy’s CEO has underscored the role of natural gas in ensuring the security of supply and boosting decarbonization on multiple occasions, stating that an effective transition requires a balance between energy security, affordability, and sustainability.

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With the aim of fortifying its natural gas arsenal, the Qatari giant is pursuing the expansion of one of the world’s largest single non-associated natural gas fields, the 6,000 km2 North Field, which represents 20% of the world’s total gas reserves. The percentage is set to increase even further with two production expansion projects: the North Field East (NFE) and the North Field South (NFS).

In addition, a new expansion project, the North Field West (NFW), was announced last month, which is expected to increase the country’s LNG production capacity by almost 85% from current production levels by 2030.