Page 14 - FSUOGM Week 42

FSUOGM PIPELINES & TRANSPORT FSUOGM

South Korean yard wins $1.7bn

order for Arctic LNG-2 carriers

RUSSIA SOUTH Korea’s Daewoo Shipbuilding & Marine and Sovcomflot, at Russia’s Far Eastern Zvezda
Engineering (DSME) has received orders worth shipyard. The pair secured financing to build the
Novatek has secured $1.7bn for six Arc7 LNG carriers (LNGCs) fleet from state development bank VEB.RF last
exemptions to that will serve Novatek’s Arctic LNG-2 project month.
regulations that require in northern Russia, Kommersant reported on Russia’s government has been pushing for
all vessels traversing the October 15 citing sources. more vessels used in the oil and gas industry to
Northern Sea Route to The orders were placed by Russian ship- be built at Zvezda as part of its import substitu-
be Russian-flagged. owner Sovcomflot and Japanese counterpart tion drive. Changes to the country’s merchant
MOL, which will charter the vessels out to Arctic shipping code have even banned the use of for-
LNG-2, according to the newspaper. DSME con- eign-flagged and foreign-built vessels to trans-
firmed the orders in a filing on the Korea Stock port oil and gas along the Northern Sea Route
Exchange, without disclosing the customers. (NSR) in the Arctic.
They will be delivered between July and Decem- However, Novatek and its partners have
ber 2023. managed to secure exemptions, after raising
The vessels’ cost, which is $283mn each, concerns that this restriction will slow the
is 15% lower than similar ships ordered for pace of development plans. The 15-strong fleet
Novatek’s Yamal LNG plant, which went online of LNGCs used at Yamal LNG were all built at
in late 2017. This reflects the weaker conditions foreign yards, and 10 ships needed for another
in the market for ship construction, as a result of Novatek’s upcoming projects, Obsk LNG,
of the economic fallout from the coronavirus will also be built overseas.
(COVID-19) pandemic. A final investment decision (FID) on Obsk
Arctic LNG-2 is due on stream in 2023 and LNG had been expected this year but has been
will produce 19.8mn tonnes per year (tpy) of delayed in light of the collapse in global gas
LNG at full capacity. Novatek is partnered at the prices as a result of the pandemic.
project with France’s Total, China’s CNPC and Constructing vessels at Zvezda is also costlier
CNOOC and Japan’s Mitsui and JOGMEC. than in South Korea, with VEB.RF estimating
A further 15 LNGCs for Arctic LNG-2 have last year that each of the Arctic LNG-2 LNGCs
been ordered by a joint venture between Novatek ordered there would cost $330mn. ™

P14 www. NEWSBASE .com Week 42 21•October•2020