September 27, 2022

MarineCurrents

Current Maritime News | Clean Energy

QatarGas made the decision to acquire 20-year old LNGCs

2 min read
marine-news-QatarEnergy expands its fleet with other 6 LNG Carriers

From QatarEnergy

A few days ago, QatarGas (Qatargas) acquired 10 LNG carriers with a capacity of 137,000 cubic meters from a consortium consisting of four Japanese shipowners.

These ships will continue to be operated by MOL and NYK in the future and Kawasaki Line (K Line) is in charge of technical management. It is reported that the sale agreement for the ships was signed following the expiry of a 25-year time charter contract.

The ships, all built in Japanese shipyards and delivered between 1996 and 2000, have been serving the Qatar Gas Company No. 1 project. Operated by Qatar Petroleum in partnership with ExxonMobil, TotalEnergies, MOL and Japan’s Marubeni Corp, the project includes three production lines with an annual output of 3.3 million tons, which are exported under fixed-term contracts to Japan and Spain.

The purchase decision made by QatarGas someways surprised the industry, which had expected the company to return the ships to their owners when the contracts expired. According to sources, the company will buy the ships at a discount, an agreement reached when the charter contracts were originally drawn up. The purchase price for each vessel is close to the remaining value of the vessel, possibly just over $10 million.

marine-news-LNGCs-sold-to-QatarGas

It is reported that the acquisition of ships does not include the 135,000-cubic meter “Dukhan” (built in 2004), the ship is the 11th ship in the Qatar Gas Company’s No. 1 project. The vessel, previously named “Swan Energy”, is scheduled to be converted into a floating storage unit (FSU) for India’s LNG import project.

Compared to the more modern 170,000-cubic-meter newbuilds, the ships are all more than 20 years old, are relatively small in size and efficiency, and may generate more emissions. This is likely to become particularly evident when the Existing Ship Energy Efficiency Design Index (EEXI) and Carbon Intensity Index (CII) come into effect in January 2023.

But sources following the company say QatarGas may choose to keep the ships as a stopgap until Qatar Energy builds ships to its satisfaction in its large shipbuilding programme. But others said it could be “a temporary arrangement” that would allow the company to double its purchase price if it chose to scrap the ships and sell them later.

Other sources said the ships could also be seen as potential regional LNG carriers capable of transporting LNG from Qatar to nearby markets in India, Pakistan, and Bangladesh. Several industry observers commented that Japan’s MOL, Nippon Yusen, and Kawasaki Kisen could be the main bidders for the newbuildings that Qatar Energy is currently seeking.

The company is currently evaluating bids from shipowners, while expanding its fleet and looking for ships for U.S. exports. The company is expected to combine these berths with the 16 already announced in the coming weeks.

Source China International LNG Summit and Exhibition