Gaztransport and Technigaz (GTT), the French designer of LNG storage tanks for ships and for onshore including record licensing orders for LNG carrier membrane tanks, has decided on a full withdrawal from contracts for Russian ships and projects.
GTT has been involved in tank design for 15 ice-breaker LNG carriers currently being built at the Zvezda Shipbuilding Complex (Zvezda) in the Russian Far East and for the design of three gravity-based storage tanks for other projects.
The Paris-based company said that as of October 1, 2022, revenues of €74 million ($80M) remained to be recognised for the ice-breaking LNG carriers by 2025 and €12M for the GBSs by 2027, which was a total exposure representing less than 6 percent of the order book.
“Following an in-depth analysis of European sanction packages No. 8 and No. 9 notably prohibiting engineering services with Russian companies, the group announces that it is ceasing its activities in Russia,” stated GTT.
The company explained that as of January 8, 2023, the contract with Russia’s Zvezda would be suspended and GTT's interventions would be limited, on the two most advanced LNG carriers, to ensuring the “safety of the projects” and the “integrity of the technology” in compliance with the international sanctions in force.
GBS projects
With regards to the GBS projects, the terms of GTT's departure are currently being finalised.
GTT added that these elements would have a financial impact mainly from 2023.
“GTT's order book will no longer include projects in Russia in the future. In addition, from 2023 onwards, the group's annual targets will exclude the revenues and EBITDA that would be generated by the last services in progress in Russia,” it added.
The company added that other shipping orders under construction in Asian shipyards, relating to six ice-breaking LNG carriers and two Floating storage units (FSUs), are intended specifically for Russian Arctic LNG projects.
“To date, these projects are proceeding normally. As of October 1, 2022, these orders represented a total revenue of €31M for GTT, to be recognised by 2024,” it said.
“Finally, eight conventional LNG carriers ordered by international shipowners, under construction in Asian shipyards, are also intended for Russian Arctic projects, but can operate in all types of conditions,” explained GTT.
“The group remains sensitive to the evolution of the situation and is taking all necessary measures to protect its employees and stakeholders, in compliance with international sanctions,” it concluded.
