Qatar Gets 3 Korean Shipbuilders $7b Jackpot

Qatar is becoming a goldmine for Korean shipbuilders as the top three companies won orders for liquefied natural gas (LNG) tankers worth $7 billion. Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries have won combined orders of 34 LNG tankers since 2004. The shipbuilders are hoping to share another 10 orders, when they are commissioned next month. The LNG carriers are high-yield orders, as they are equipped with large spherical or box-shaped storage tanks, which are technically difficult to build but are lucrative for the makers. The carrier¡¯s average price exceeds $200 million, which is about three times more expensive than standard-size container ships whose price is around $70 million. Daewoo won 19 of the 34 orders, including three super-large tankers it won last month. Samsung also took orders for 10 tankers. Hyundai received orders for five ships.

The LNG ships are built for two separate gas export projects in Qatar _ Ras Gas project which will ship natural gas to the United States, and Qatar Gas II project which is for the British market. Both projects are run by joint ventures of state-run Qatar Petroleum and global energy giant ExxonMobil. Though the deals are yet to be signed, Daewoo, Samsung and Hyundai are about to win orders for three, four and four LNG tankers respectively from the Qatar Gas II project next month, Hyundai¡¯s public relations official Hur Kwang-hee said. Also, the Korean shipbuilders are expecting even bigger profits in the future from the Middle Eastern country as the Qatar Gas III project is ready to leave the drawing board. Although the size and the number of the proposed LNG tankers have yet to be decided, the project is expected to be commissioned by 2009. According to market research firm Clarkson, South Korea’s shipbuilders swept from No.1 through No.7 worldwide last year in terms of orders received. The top three firms won 70 percent of total LNG tank orders last year. Source: Korea Times