South Korean shipbuilding major Samsung Heavy Industries Co. has secured its single largest contract to build 15 liquefied natural gas (LNG) carriers in Qatar.

Samsung Heavy Industries said on Tuesday that it will build 15 174,000 cubic meter LNG carriers in a deal worth 4.57 trillion won ($3.4 billion). The vessels will be delivered to an unidentified owner in the Middle East.

Samsung Heavy Industries did not disclose information on the shipowner but industry observers expect it to be Qatar’s LNG heavyweight QatarEnergy given the region and size of the order.

The Qatar government has been engaged in a project designed to increase the country’s annual LNG production to 126 million tons by 2027 from the current 77 million tons.

In June 2020, Qatar signed a deed of agreement (DOA) for large-scale slot reservations with Korea’s top three shipbuilders HD Hyundai Heavy Industries Co., Hanwha Ocean Co., and Samsung Heavy Industries.

In the first phase of the project that took place last year, the three Korean shipbuilders signed a massive deal to build 54 LNG carriers with Qatar.

In the latest deal, however, the unit price at which Samsung Heavy Industries secured the order was below the market average per ship.

The LNG carrier has been priced at $230 million per unit, lower than the current global LNG carrier price of $265 million.

Multiple factors were behind the lower price.

Sources familiar with the matter said the shipbuilder had an upper limit on pricing, as the price set by the DOA in 2020 made it hard for Samsung Heavy Industries to set prices above the threshold.

In response to concerns about the lower price, the shipbuilder said that its profitability will remain intact as it expects the economies of scale to be generated by the large order.

By Choi Hyun-jae and Han Yubin

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