Contract with Seonjoosa Korea Consortium
"No significant difference from recent freight rates"
[Asia Economy Reporter Moon Chaeseok] Among the three major domestic shipbuilders, Daewoo Shipbuilding & Marine Engineering (DSME) has successfully secured a massive LNG carrier order project worth 24 trillion won originating from Qatar for the first time.
On the 7th, DSME announced that it had received an order for four 174,000 cubic meter (㎥) class LNG carriers from a Korean consortium consisting of H Line Shipping, Pan Ocean, and SK Shipping. The total contract amount is 1.0734 trillion won.
The vessels will be built at the Okpo Shipyard and delivered to the shipowners by the first quarter of 2025, after which they will be deployed in QatarEnergy's North Field expansion project.
Qatar, the world's largest LNG producer, is currently implementing a production increase plan to expand its LNG production capacity from about 77 million tons to 126 million tons by 2027.
As part of this plan, Qatar Petroleum (QP), Qatar's state-owned oil company, signed a slot contract in June 2020 with the domestic big three shipbuilders, including DSME, for the construction of over 100 LNG carriers. A slot contract refers to pre-reserving docks for new shipbuilding.
The project scale is $19 billion (approximately 24 trillion won). The LNG carriers ordered by DSME on this day are the first vessels to be built under the project and are expected to lead to additional orders in the future.
The LNG carriers ordered this time are large 174,000 ㎥ class vessels equipped with low-pressure dual-fuel engines (ME-GA) and reliquefaction facilities, which can significantly reduce emissions of air pollutants. To ensure efficient vessel operation, the company's smart ship solution DS4 and other latest technologies will be applied.
DSME previously secured nearly half of the total 53 vessels in the Qatar project from 2004 to 2007, successfully delivering 26 vessels. DSME's annual LNG carrier construction volume is about 20 vessels.
So far, DSME has secured orders worth a total of $5.47 billion, including 16 LNG carriers, 6 container ships, and 1 offshore plant, achieving 61.5% of this year's target of $8.9 billion. This figure is nearly double the $2.73 billion ordered during the same period last year.
A DSME official said, "We will lead the successful progress of the project in cooperation with QatarEnergy-QatarGas-Korean consortium."
Meanwhile, the average price of the LNG carriers contracted by DSME on this day was 270 billion won, which is not significantly different from the current average ship price of $227 million (285.5 billion won). This result differs from concerns that the 'big three' would suffer significant losses if contracts were signed under the 2020 conditions due to rising raw material costs and new ship prices.
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