Contracts for 15 Arc7s confirmed

Thursday, 17 September 2020
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Sovcomflot (SCF) and NOVATEK have confirmed an order for another 10 Arc7s from Zvezda Shipyard to be financed by VEB.RF.

The two companies joint venture, SMART LNG, has also agreed with VEB.RF and Zvezda to construct and lease the 10 Arc7s.

In total, contracts for 15 LNGCs have now been signed, which includes the building, financing, lease, and timecharter agreements for the vessels.

The contract for the lead ship in the series - a pilot project - was signed by SCF in October, 2019, while the other four were signed by SMART LNG in January, 2020.

With 10 long-term timecharters added to this portfolio, SCF Group has $20 bill in contracted future earning and receivables, the company explained.

The vessels will be operated under the Russian flag, while the Russian Maritime Register of Shipping (RS) will provide supervision during their construction.

At the same time, NOVATEK confirmed that its joint venture, Arctic LNG 2, had agreed long-term charter agreements for 14 Arc7s with SMART LNG.

Earlier, the Arctic LNG 2 partners - NOVATEK, TOTAL, CNPC, CNOOC, and a consortium involving Mitsui and JOGMEC - had approved the construction of the 15 Arc7s at Zvezda.

They will be the prime vessels of the project’s Arctic fleet that will allow the year round LNG shipments along the Northern Sea Route to the Asia/Pacific region, and will provide an important stimulus to develop the Russian shipbuilding industry, NOVATEK said.

Igor Tonkovidov, SCF President and CEO, commented: “Shipbuilding and timecharter contracts for 15 Arc7 LNGCs, signed between 2019/2020, enable the Russian shipping community to play a role in transporting cargoes of strategic importance for the Russian economy, which are generated by large-scale energy projects in the Russian Arctic.

“These contracts will also help to further develop our national expertise in ice navigation and create over 850 new jobs for Russian seafarers, as all the 15 vessels will have Russian crews.

“We are pleased to see that this new generation of Arctic LNGCs, which will contribute significantly to growing the cargo traffic along the Northern Sea Route, was designed based on SCF’s long-standing experience of safely operating vessels in ice conditions.

“Equally significant is the fact that the co-operation between SCF, NOVATEK, VEB.RF Group and Russian shipbuilders paves the way for establishing the domestic production of LNGCs, which entails adopting advanced technologies and engineering solutions,” he concluded.

Atlanticmax

In addition, on 14th September, SCF took delivery of ’SCF Barents’. The following day, the vessel embarked upon her maiden voyage under a long-term timecharter agreement with a Shell subsidiary.

‘SCF Barents’ is the second of three 174,000 cu m Atlanticmax LNGCs ordered by SCF Group in 2018 at Hyundai. The first, ’SCF La Perouse’, was delivered in February, 2020.

The third and final vessel, ‘SCF Timmerman’, is due to be delivered early next year.

Each Atlanticmax is equipped with a GTT Mark III Flex cargo containment system, slow-speed dual-fuel X-DF engine, and a system that reduces nitrogen oxide emissions while the vessel sails in liquid fuel mode.

In addition, all vessels of the series are among the first globally to feature a boil-off gas partial re-liquefaction system, which significantly reduces cargo losses while on long voyages or awaiting cargo operations. 

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