Page 6 - FSUOGM Week 39 2019
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FSUOGM PIPELINES & TRANSPORT FSUOGM
Novatek faces risk from sanctions on Chinese partner
RUSSIA
Novatek is relying on Cosco to help build its LNG tanker fleet.
RUSSIA’S second-largest natural gas producer and Novatek could face set backs from US sanc- tions imposed on Chinese shipping company Cosco. Novatek’s first LNG plant Yamal could lose third of its LNG tanker fleet, as six Arc7 ves- sels are owned by Cosco and Canadian Teekay, Kommersant daily reported on October 1.
Resolving the logistics issues of LNG delivery is seen as crucial for Novatek to catch up with adding LNG output. Analysts told Vedomosti daily previously that about 30 tankers would be enough to handle all the LNG, which will be produced at Novatek’s operating Yamal LNG and planned Arctic LNG-2.
Analysts surveyed by Kommersant believe that the sanctioned Chinese tankers could still be used on domestic Russian routes, but the tankers are likely to be docked until the situation with the sanctions is clarified.
Novatek also risks losing another five tankers Arc7, that are to be delivered by Dynagas. Cosco
controls 25.5% in the company, which should exempt it from sanctions, but special cases might apply.
Another three tankers were ordered from 50/50 joint venture of Japanese MOL and Shang- hai LNG, another Cosco affiliate. This would make 14 out 15 Arc7 Novatek’s tankers directly or indirectly affected by the sanctions.
“Although sanctions may temporarily translate into higher transportation expenses of Yamal, we see no material impact on project’s valuation at this stage,” BCS Global Markets commented on October 1.
Most recently the CEO of Novatek Leonid Mikhelson said the company is looking for new sales channels as Yamal’s productivity was 7%-8% higher than projected in 1H19, with the excess output expected at about 1.5mn tonnes of LNG by the end of 2019. He added that the plant will launch an additional line in 1Q20, which will increase output by an extra 1mn tons.
French tech firm lands work at Arctic LNG-2
RUSSIA
GTT is also eyeing opportunities in Russia’s LNG transport sector.
FRENCH LNG tech firm GTT has secured design and construction work at Russia’s Arctic LNG-2 project, it said on September 26.
The company has signed a contract with a joint venture between Italy’s Saipem and Tur- key’s Renaissance Heavy Industries that has been tasked with supplying the LNG plant’s three gravity-based structures (GBS). Two of these structures will contain a pair of 114,500-cubic metre LNG storage tanks and one 980-cubic metre ethane storage tank. The third will have two additional 114,500-cubic metre LNG tanks.
GTT will carry out design, construction studies and technical assistance for these facili- ties using its patented technology. The GBSs will be built at a shipyard in Murmansk before being towed to Arctic LNG-2’s location on the Gydan Peninsula.
GTT, which mainly provides storage solu- tions for LNG carriers, hailed the order as its first GBS project.
“We are very confident in the perspectives of this solution and are looking forward to work- ing on this project with our highly experienced partners in order to accompany them from an early stage,” GTT CEO Philippe Berterottiere
commented.
Saipem and Renaissance’s construction con-
tract at Arctic LNG-2 is worth $2.5bn. The pro- ject was green-lighted by Russia’s Novatek and its international partners last month and is due to start up in 2023. At peak capacity it will export up to 19.8mn tonnes per year (tpy) of LNG.
Delivering these cargoes will require an expansion in Russia’s LNG tanker fleet, and GTT is eyeing opportunities here as well. It secured approval in principle (AiP) in September from the Russian Maritime Register of Shipping (RMRS) for deploying its Mark III Flex and NO96 LO3+ storage systems in Arc7 ice-class ships. These vessels are used to transport LNG from Novatek’s Arctic projects to markets in Asia and Europe. GTT said its systems boasted daily boil-off rates of 0.085% and 0.1% respectively.
GTT suffered a 25% dip in profits in the first half of 2019, despite its order intake remaining solid. Net income came to of €56.6mn ($63mn) in the six months ending June 30, down from €75.7mn a year earlier. Revenues fell 3.6% year on year in the six-month period to €122.6mn, but were up 8.2% quarter on quarter for April to June.
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w w w . N E W S B A S E . c o m Week 39 02•October•2019
