Page 7 - FSUOGM Week 06 2020
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FSUOGM
PIPELINES & TRANSPORT FSUOGM
Construction of first Arctic LNG-2 carriers clear to begin
The Christophe de Margerie (pictured) Arc7 LNG tanker
was built in South Korea and serves the Yamal LNG project. Novatek’s future projects will mostly rely on domestically-built carriers.
RUSSIA
CONSTRUCTION of the first four LNG carri- ers needed for Novatek’s Arctic LNG-2 project is now clear to begin, after a long-awaited financing deal was reached last week.
SMART LNG, a joint venture between Novatek and Russian shipping group Sovcom- flot, has signed a lease financing agreement for the vessels with state development bank VEB.RF, Sovcomflot reported on February 7.
VEB.RF placed an order for the ships in November last year at the Zvezda shipyard in the Far East, managed by a joint venture between Rosneft and Gazprombank. The bank confirmed in its own statement it had transferred the first tranche of payment for the vessels to Zvezda. SMART LNG has also signed long-term con- tracts to lease out the vessels to the Arctic LNG-2 operating company.
Arctic LNG-2 is Novatek’s next major LNG export project, following the launch of Yamal LNG in December 2017. It is slated to start up in 2023 and produce up to 19.8mn tonnes per year (tpy) of LNG at peak capacity. Novatek’s partners in the venture are France’s Total, Chi- na’s CNPC and CNOOC Ltd., and Japan’s Mitsui and JOGMEC.
The terminal will require a fleet of 15 Arc7- class LNG carriers, capable of breaking through ice along Russia’s Northern Sea Route to deliver its super-chilled gas to Asian and European mar- kets on a year-round basis. Unlike Yamal LNG,
whose carriers were all built by South Korea’s Daewoo Shipbuilding and Marine Engineering (DSME), Arctic LNG-2 tankers are all due to be constructed at Zvezda, supporting Russia’s import substitution drive.
VEB.RF has agreed to fund construction of the entire fleet, expected to cost $5bn, provided that additional lease financing agreements are reached.
Novatek expects to require as many as 47 extra LNG carriers to handle gas from its Arc- tic LNG projects by 2030, in addition to the 15 already working at Yamal LNG, company CEO Leonid Mikhelson told Russia’s TASS in January. It anticipates that 35-37 of the tankers will be built at Zvezda and 10 at foreign shipyards.
In a letter to Russian President Vladimir Putin in November, Mikhelson said the com- pany needed to order some vessels from foreign shipbuilders because Zvezda lacked the capac- ity to construct so many ships in such a short timeframe.
Novatek has several other export projects in the pipeline, in addition to Arctic LNG-2. The company aims to take a final investment decision (FID) this year on the 5mn tpy Obsk LNG termi- nal, also slated for launch in 2023. In the coming years it also expects to sanction the Arctic LNG- 1, which should have a capacity of around 20mn tpy. A decision on Arctic LNG-3, which will have a similar size, is due to be made at a later stage.
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