LNG

Zvezda Shipbuilding in the Russian Far East has held a steel-cutting ceremony for the first in a series of 15 ice-breaking LNG carriers ordered by the nation’s Sovcomflot shipping line to serve the Arctic LNG II export project being developed by natural gas company Novatek.

The Zvezda complex is located at Bolshoi Kamen on the coast of the Sea of Japan and about 12 miles northeast of the city of Vladivostok.

The shipbuilder is owned by a consortium of Russian energy companies, including Rosneftegaz, Rosneft and the financial affiliate of Gazprom, Gazprombank.

Shipbuilding, financing, lease, and time-charter contracts were signed last year by the four companies involved in ordering the 15 vessels, the first of which is scheduled for delivery in the first quarter of 2023.

Participants in the ceremony on November 20 included Yury Borisov, Deputy Prime Minister of the Russian Federation, Leonid Mikhelson, Chairman of Novatek, Igor Tonkovidov, President and Chief Executive of Sovcomflot and Sergey Tseluyko, Managing Director of Zvezda Shipbuilding and Daniil Algulyan, Deputy Chairman of VEB.RF, the Russian bank providing the financing.

“The steel-cutting for the lead vessel heralds the building of a new generation of ice-breaking LNG carriers,” said Sovcomflot (SCF).

“The design of these new vessels incorporates the many years of experience Sovcomflot has acquired in operating large vessels within challenging ice conditions,” it added.

“The engineering solutions selected for this class of vessel will enable increased speed and manoeuvrability when sailing in ice conditions, compared with ice-breaking LNG carriers of the previous generation,” explained the shipping line.

“This will, for the first time, allow year-round navigation in the eastern sector of the Russian Arctic, thereby expediting the implementation of national plans to boost cargo traffic along the Northern Sea Route,” it added.

All the vessels in the series will be assigned an Arc7 ice class.

The first LNG carrier of the series was ordered directly by SCF, while the other 14 vessels were ordered by Smart LNG, a joint venture of Sovcomflot and Novatek.

The shipbuilding process is being supervised by the Russian Maritime Register of Shipping.

During the ceremony, Deputy Federation Minister Borisov said that the start of work was preceded by a “tremendous effort” both in terms of organisation and production preparations.

“These vessels will significantly contribute to the development of cargo traffic along the Northern Sea Route, which is strategically important for Russia,” explained Borisov.

Each vessel will have capacity of more than 172,000 cubic metres and be 300 metres long and over 48 metres wide. Their power capacity is 45 megawatts, with each vessel equipped with three unique azimuth propulsion units.

“The start of construction of the first in this new generation of LNG carriers by Zevzda is a significant milestone for the Russian shipbuilding industry, which has never before constructed vessels with this level of engineering complexity,” said SCF CEO Tonkovidov.

“We are looking forward to continuing our close collaboration with our partners and are ready to further support the Russian civilian shipbuilding industry as part of the implementation of major energy projects,” stated the CEO.

All the 15 new LNG carriers will be registered under the Russian flag and will be operated by Russian crews.

The Arctic LNG II project is being developed with three gravity-based platforms and the estimated capital expenditure for the joint venture is now put at the equivalent of US$21.3 billion.

Arctic LNG will produce almost 20 million tonnes per annum of LNG as well as gas concentrate from the principal feed-gas resources, the Utrenneye gas field.

Novatek holds 60 percent of the Arctic LNG project and four other 10 percent stakes are shared between various shareholders.

The 10 percent holdings belong to French major Total, which is also a shareholder in the Novatek company, China National Petroleum Corp., China National Offshore Corp. and a Japanese investor group comprising Mitsui & Co. and the government institution, the Japan Oil, Gas and Metals National Corporation (Jogmec).