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“Temperatures in northern China The analyst added: “Utilisation rates of 141
have dropped significantly, and some domestic LNG factories reached 63.18% this
cities even experienced rain and snow. week, expanding 9.18 percentage points com-
A very cold winter is likely on the hori- pared with the same period last year.”
zon, which will drive LNG demand for The analysts were confident that imports
city gas firms,” Zhai added. would continue to rise this year, supporting
SCI99 analyst Feng Haicheng said: “Since domestic prices in the process.
some regions in northern China have already SCI99 analyst Zhang Rongrong said: “Look-
entered the winter heating season, it is now a ing ahead, with the gradual decrease in temper-
tight balance between supply and demand in the ature and more cities entering the winter heating
natural gas market.” season, LNG prices will likely remain bullish.”
South Korean yard wins $1.7bn
order for Arctic LNG-2 carriers
PIPELINES & SOUTH Korea’s Daewoo Shipbuilding & Marine
TRANSPORT Engineering (DSME) has received orders worth
$1.7bn for six Arc7 LNG carriers (LNGCs)
that will serve Novatek’s Arctic LNG-2 project
in northern Russia, Kommersant reported on
October 15 citing sources.
The orders were placed by Russian ship-
owner Sovcomflot and Japanese counterpart
MOL, which will charter the vessels out to Arctic
LNG-2, according to the newspaper. DSME con-
firmed the orders in a filing on the Korea Stock
Exchange, without disclosing the customers.
They will be delivered between July and Decem-
ber 2023.
The vessels’ cost, which is $283mn each,
is 15% lower than similar ships ordered for
Novatek’s Yamal LNG plant, which went online
in late 2017. This reflects the weaker conditions
in the market for ship construction, as a result
of the economic fallout from the coronavirus
(COVID-19) pandemic. and foreign-built vessels to transport oil
Arctic LNG-2 is due on stream in 2023 and gas along the Northern Sea Route
and will produce 19.8mn tonnes per year (NSR) in the Arctic.
(tpy) of LNG at full capacity. Novatek is However, Novatek and its partners have
partnered at the project with France’s Total, managed to secure exemptions, after raising
China’s CNPC and CNOOC and Japan’s concerns that this restriction will slow the
Mitsui and JOGMEC. pace of development plans. The 15-strong fleet
A further 15 LNGCs for Arctic LNG-2 have of LNGCs used at Yamal LNG were all built at
been ordered by a joint venture between Novatek foreign yards, and 10 ships needed for another
and Sovcomflot, at Russia’s Far Eastern Zvezda of Novatek’s upcoming projects, Obsk LNG,
shipyard. The pair secured financing to build the will also be built overseas.
fleet from state development bank VEB.RF last A final investment decision (FID) on Obsk
month. LNG had been expected this year but has been
Russia’s government has been pushing delayed in light of the collapse in global gas
for more vessels used in the oil and gas prices as a result of the pandemic.
industry to be built at Zvezda as part of its Constructing vessels at Zvezda is also costlier
import substitution drive. Changes to the than in South Korea, with VEB.RF estimating
country’s merchant shipping code have last year that each of the Arctic LNG-2 LNGCs
even banned the use of foreign-flagged ordered there would cost $330mn.
P14 www. NEWSBASE .com Week 42 22•October•2020
