Seven more ships ordered! Hudong-Zhonghua aims to be the leading builder of LNG carriers in China

2022-09-30 09:00

Following the initial order of four vessels in April this year, Hudong-Zhonghua is poised to receive an additional order for seven large LNG carriers from Qatar's "100-ship plan." In just six months, Qatar has ordered over 60 LNG carriers from four shipbuilding companies in China and South Korea. Hudong-Zhonghua, as the sole Chinese shipyard, continues to be a leader in the construction of LNG carriers for the Chinese shipbuilding industry.

According to TradeWinds, QatarEnergy is expected to sign construction and charter contracts for these seven LNG carriers from Hudong-Zhonghua before the end of October. Most of the new vessels will be ordered by NYK Line as the shipowner, and NYK Line may also collaborate with other companies.

In August this year, NYK Line, Kawasaki Kisen Kaisha, China LNG Shipping (Holdings) Co., Ltd. (CLNG), and MISC Berhad jointly established a joint venture shipowner company. This company signed a contract with Hyundai Heavy Industries Group in South Korea for the construction of seven 174,000 cubic meter LNG carriers, with a total value of approximately US$1.5 billion.

CLNG, NYK Line, Kawasaki Kisen Kaisha, and MISC are all major LNG carrier operators in Asia. These four companies previously formed a consortium to bid on a 12-vessel LNG carrier project within QatarEnergy's "100-ship plan." This implies that, in addition to the seven vessels from Hyundai Heavy Industries Group, the joint venture company may order more LNG carriers.

On April 10 this year, Hudong-Zhonghua received the contract to build the first four 174,000 cubic meter LNG carriers for Qatar's "100-ship plan." The shipowner at that time was Mitsui O.S.K. Lines. Qatar's LNG carriers will utilize Hudong-Zhonghua's independently developed and designed fifth-generation "Chang Heng series" 174,000 cubic meter vessel type. It incorporates the essence of the designs of the previous four generations of LNG carriers, is developed according to the latest global design concepts, and combines excellent hydrodynamic characteristics and outstanding versatility. The vessel has an overall length of 299 meters, a width of 46.4 meters, and a depth of 26.25 meters. It is tailored to the technical standards established by QatarEnergy's operation of the world's largest LNG fleet, adopts the latest generation of twin-skeg hull lines, and is equipped with multiple low-carbon energy-saving and digital technologies.

Qatar is the world's largest LNG producer. The expansion of its North Field will increase Qatar's annual LNG production capacity from 77 million tons to 126 million tons in 2027. To support the North Field expansion plan, Qatar launched the "Qatar 100-Ship Construction Plan - Qatar North Field Expansion Vessel Procurement Project" in early 2019. The initial plan was to build 60 LNG carriers to support the planned capacity expansion; in the next 10 years, Qatar's LNG carrier construction projects are expected to exceed 150 vessels.

In April 2020, QatarEnergy first signed a preliminary agreement with China Shipbuilding Group for an LNG carrier construction project worth 20 billion RMB. In June 2020, QatarEnergy signed a memorandum of agreement (MOA) with the three major South Korean shipbuilders, including Daewoo Shipbuilding & Marine Engineering, reserving a significant portion of their LNG carrier construction capacity for QatarEnergy until 2027.

Due to confidentiality agreements, the specific number of vessels in the relevant agreements has not been publicly disclosed. However, industry speculation suggests that the contracts for the three major South Korean shipbuilders are for 45 vessels each, totaling 135 vessels; Hudong-Zhonghua's contract may be for up to 20 vessels.

Following Hudong-Zhonghua's order of four vessels in April this year, QatarEnergy subsequently ordered 50 LNG carriers from the three major South Korean shipbuilders. Hyundai Heavy Industries Group received orders for 19 vessels, Samsung Heavy Industries for 18, and Daewoo Shipbuilding & Marine Engineering for 13. Including the seven vessels soon to be finalized with Hudong-Zhonghua, the number of effective orders for QatarEnergy's "100-ship plan" will increase to 61.

According to International Ship Network, Hudong-Zhonghua is one of the few shipbuilders globally with the capability to research, design, and build a full range of large (174,000 cubic meters), medium (80,000 cubic meters), and small (14,000 cubic meters) LNG carriers, covering both ocean-going and inland river LNG transport vessels. According to Clarksons data, Hudong-Zhonghua's cumulative LNG carrier order intake has reached a record 20 vessels so far this year, including 19 large 174,000 cubic meter LNG carriers and one 14,000 cubic meter LNG bunkering vessel. As of now, the company has a total backlog of 33 LNG carriers.

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