СовКомФлот

Sovcomflot and MOL seal charter deals on Arc7 LNG sextet

TradeWinds

Russian shipowner Sovcomflot (SCF Group) and Japan’s Mitsui OSK Lines have inked long-term charter deals for six specialised Arc7 LNG carrier newbuildings.

The ships will be chartered by the operator of the Novatek-led Arctic LNG 2 project, which is under construction in Russia. The newbuildings, which are worth $280m each, were ordered earlier this month.

Novatek said that including the previously signed charter agreements for 15 similar LNG carriers to be built at Zvezda Shipbuilding Complex in Russia: "The project has successfully completed chartering of the required ice-class tanker fleet."

Sovcomflot said on Wednesday that it has concluded 30-year time charter agreements on its trio of 172,410-cbm ice-breaking LNG carriers.

These vessels were ordered at South Korean yard Daewoo Shipbuilding & Marine Engineering earlier in October following a tender held by the Novatek-led project’s operator.

DSME said this month that is had won an order for six LNG carriers from two shipowners worth KRW 2trn ($1.7bn).

This prices the newbuildings at $283.3m each. This is cheaper per-ship price paid for 15 Arc7 ice-class LNG carriers DSME built for Novatek’s Yamal LNG project between 2017 and 2019.

The 19.8-million-tonnes-per-annum Arctic LNG 2 is being developed by Novatek, working in partnership with French energy major Total, China National Petroleum Corp, China National Offshore Oil Corp and Japan Arctic LNG, a consortium of Mitsui and JOGMEC. It is due to start-up in 2023.

All the LNG newbuildings are scheduled for delivery in 2023 to dovetail with the project.

Sovcomflot said its trio will fly the Russian flag and have Russian crews.

President and chief executive Igor Tonkovidov said: “Strengthening SCF’s position in LNG shipping segment is amongst the priorities of our current long-term development strategy, which is aimed at growing highly visible long-term, cyclically resistant and higher-margin infrastructure cash flows.”

Tonkovidov said the total contract backlog relating to these new time charter agreements, over the 30-year charter period, is estimated at $4.2bn.

“This will increase SCF’s total contract backlog to approximately $24bn,” he said.

He went on to thank Arctic LNG 2’s lead developer, Russian gas company Novatek and its subsidiaries operating the project and sister liquefaction development Yamal LNG for their support in implementing LNG projects in the Russian Arctic.

Tonkovidov said these are of “significant importance” for the Russian economy.

I am looking forward to the next stage of our close collaboration,” he added.

Sovcomflot, which completed a long-planned initial public offering in Moscow at the start of this month, was the first company to order and operate an Arc7 LNG carrier.

The company’s 172,600-cbm Christophe de Margerie (built 2017) has been shipping cargoes from Yamal LNG in the Russian Arctic since its delivery.

Sovcomflot said these latest newbuildings will each feature a propulsion system with three Azipod units that will have a total capacity of 51 MW, which is comparable to that of the 55-MW Russian nuclear ice breaker 50 Let Pobedy.

“This propulsion system is expected to provide new vessels with increased speed and manoeuvrability when sailing in ice conditions, compared with ice-breaking LNG carriers of the previous generation," the company said.

"The delivery of this new generation of ice-breaking LNG carriers should contribute towards opening year-round navigation along the eastern sector of the Northern Sea Route."

Sovcomflot currently has 15 gas carriers in operation and a further 19 under construction.