QatarEnergy doles out $6 billion for 18 huge LNG vessels on historic fleet expansion mission

Qatar’s state-owned energy giant QatarEnergy is bolstering its giant liquefied natural gas (LNG) fleet expansion with a $6 billion deal for 18 ultra-modern QC-Max size LNG vessels, which are said to be the largest LNG ships ever built.

Illustration; Source: QatarEnergy

​The Qatari heavyweight’s agreement with China State Shipbuilding Corporation (CSSC) will enable the construction of 18 QC-Max size LNG vessels, with a capacity of 271,000 cubic meters each, which will be built at China’s Hudong-Zhonghua Shipyard, a CSSC wholly-owned subsidiary. With a total length of 344 meters, a beam of 53.6 meters, a depth of 27.2 meters, and a designed draft of 12 meters, these vessels will adopt a dual-fuel low-speed engine propulsion system and the NO96 Super+ containment system.

While elaborating that the carrying capacity of the ship’s cabin is 57% higher and the energy consumption per ton-mile cargo transportation is 9.9% lower than that of a conventional 174,000-cubic-meter large LNG carrier, CSSC underscores that the vessel’s carbon intensity index (CII) is 23% lower with diversified and optimized draft and loading design enabling the ship to cover major mainstream routes with excellent ship-shore compatibility.

The multibillion-dollar deal for these ships was signed in Beijing by Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs, President and CEO of QatarEnergy; Chen Jianliang, Chairman of Hudong‐Zhonghua Shipbuilding; and Li Hongtao, Chairman of China Shipbuilding Trading, during a ceremony attended by senior executives from QatarEnergy, QatarEnergy LNG, and China State Shipbuilding Corporation.

In addition, the signing ceremony was attended by several senior Chinese government officials and Mohamed Abdullah Al-Dehaimi, Qatar’s Ambassador to the People’s Republic of China. According to the Persian Gulf state’s LNG titan, eight of the 18 QC-Max size LNG vessels will be delivered in 2028 and 2029, while the other ten will be delivered in 2030 and 2031.

Al-Kaabi highlighted: “With a total value of almost 6 billion dollars for these ultra-modern, largest ever LNG vessels by size, the agreement we signed today is the industry’s largest single shipbuilding contract ever. It is our honor to continue working with China State Shipbuilding Corporation and Hudong-Zhonghua Shipyard to develop and build some of the top-tier LNG vessels renowned for their exceptional environmental qualities.

“And as we take this important step together, I would like to affirm QatarEnergy’s determination to live up to our commitment to provide a safe and reliable energy source in the form of LNG, while always giving priority to environmental sustainability.”

Furthermore, Al-Kaabi points out that 12 conventional-size LNG vessels are currently under construction at Hudong-Zhonghua, with the delivery of the first such vessels expected by the third quarter of this year. The latest addition to QatarEnergy’s massive LNG fleet expansion program comes after the inking of time charter party agreements for a total of 104 conventional-size vessels, which is said to constitute the largest shipbuilding and leasing program ever in the history of the industry.

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The first stage of the Qatari player’s historic LNG shipbuilding program was set in motion with the order of 60 vessels at Korean and Chinese shipyards. The start of the company’s second phase of the mega shipbuilding program came in September 2023, when an order was placed for the construction of 17 LNG carriers. The firm picked Qatar Gas Transport Company (Nakilat) to own and operate up to 25 conventional-size LNG carriers under the TCP agreements from March 2024.

​Following the agreement with CSSC, QatarEnergy signed long-term time charter party (TCP) deals with three ship owners – China Merchants Group, Shandong Marine Group, and China LNG Shipping (Holdings) Limited – for the operation of nine new, ultra-modern LNG vessels as part of the QC-Max section of its LNG fleet expansion program. With a capacity of 271,000 cubic meters each, these nine vessels are part of 18 QC-Max LNG carriers that will be built in Hudong-Zhonghua shipyards in China.

QatarEnergy’s CEO penned these three separate sets of agreements in Beijing with Wang Yongxin, President of CMES, for the operation of four vessels; Li Maozhong, Chairman of Shandong Marine Energy, for the operation of three ships; and Cong Jian, General Manager of CLNG, for the operation of two vessels. 

Al-Kaabi emphasized: “These nine vessels are part of QatarEnergy’s historic program to support our expanded LNG production capacity from the North Field, which will reach 142 million tons per annum by 2030, and which will also help meet our long-term fleet replacement requirements.

“Our partnerships with China’s shipbuilding industry and the esteemed shipowners, will ensure the long-term operation, deployment, and management of these vessels in a manner that maximizes their potential over decades to come.”

The new deals strengthen the growing ties between China and Qatar, especially in the energy sector, where Qatari LNG supplies to its main customers in China reached almost 17 million tons in 2023. Additionally, Qatar was one of the Chinese market’s major suppliers of crude oil with 8.6 million tons, naphtha with 2.3 million tons, LPG with 2.2 million tons, Helium with 650 million cubic feet, and fertilizers, polymers, and chemicals of about 1.6 million tons last year.

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Two of China’s national energy companies joined Qatar’s North Field Expansion projects as partners in 2023, with Sinopec acquiring a 1.25% interest in the North Field East (NFE) project and a 1.875% interest in the North Field South (NFS) project, while at the same time signing 27-year LNG sales and purchase agreements for a total of seven million tons per annum.

On the other hand, China National Petroleum Corporation (CNPC) has acquired a 1.25% interest in the North Field East project and signed a 27-year LNG sales and purchase agreement for four million tons per annum.

On the sidelines of the signing ceremonies for the QC-Max LNG vessel agreements, Al-Kaabi met separately with Dai Houliang, Chairman of CNPC; Ma Yongsheng, Chairman of Sinopec; and Wang Dongjin, Chairman of China National Offshore Oil Corporation (CNOOC) to discuss ways to enhance the bonds with these energy players.

QatarEnergy’s CEO also took the opportunity to meet with Miao Jianmin, Chairman of China Merchants Group; Jiang Guodong, Chairman of Shandong Marine Group; and Zhang Yong, Vice President of COSCO Shipping Group.

The Persian Gulf state’s energy heavyweight has set the stage to increase its gas reserves by adding another expansion project to its arsenal at the North Field, thus, the North Field East (NFE) and the North Field South (NFS) undertakings will be joined by the North Field West (NFW) project, which is anticipated to ramp up the country’s LNG production capacity by nearly 85% from current production levels by 2030.

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Aside from this, the Qatari giant is determined to ramp up its oil production at the country’s largest offshore oil field by about 100,000 barrels per day. To this end, the firm handed out four multibillion-dollar engineering, procurement, construction, and installation (EPCI) contract packages to multiple players, including McDermott, HD Hyundai Heavy Industries, Larsen & Toubro, and China Offshore Oil Engineering (COOEC).

QatarEnergy’s plans to up its oil and gas ante align with Al-Kaabi’s view that employing a balancing act between energy security, affordability, and sustainability will enable countries around the globe to propel the energy transition journey forward.