LNG

July 9 (LNGJ) - Sovcomflot, the Russian shipping line with 31 gas carriers in operation or on order and an overall fleet of 145 vessels, has received confirmation from France’s TotalEnergies of the exercise of its option for two further next-generation 174,000 cubic metres capacity LNG carriers. “The vessels will be chartered for a period of up to seven years, operating within the TotalEnergies global LNG portfolio under the technical management of Sovcomflot,” said SCF.

   “The option was exercised under a contract between TotalEnergies and Sovcomflot signed earlier in 2021 for one sister vessel for delivery in the third quarter of 2023,” added SCF. The two chartered carriers have twin slow-speed X-DF engines, a hull-air lubrication system. They also have two shaft generators with electronic frequency converters and will provide significant fuel savings with the re-liquefaction system minimising Gas Combustion Unit usage.

French energy company Total along with South Korean shipbuilder Hyundai Heavy Industries and Russian fleet operator Sovcomflot have concluded a deal with options as the build-out continues on the next generation of LNG vessels.

As part of the global fleet expansion, Sovcomflot and Total have concluded a time-charter agreement for up to seven years for a newbuilding LNG carrier with capacity of 174,000 cubic metres to be owned and operated by Sovcomflot, with options for up to two additional vessels.

A Web conference was held to mark the event attended by Igor Tonkovidov, President and Chief Executive Sovcomflot, Thomas Maurisse, Senior Vice President for LNG at Total and Seong-Yong Park, Senior Executive Vice President and Chief Operating Officer at HHI.

The new vessel will be the latest in a series of SCF’s new-generation conventional Atlanticmax LNG carriers, with three sister ships already in operation, the “SCF La Perouse”, the “SCF Barents” and the “SCF Timmerman”.

“The vessel will be fitted with an X-DF propulsion system, operated by a slow-speed diesel engine with a direct drive to the propellers, which will enable a substantial reduction in the vessel’s fuel consumption when compared with previous generations of LNG carriers,” the companies explained.

“The new carrier will also be fitted with a hull air lubrication system which, combined with two shaft power generators with frequency-to-current converters, is expected to deliver a further significant decrease in fuel consumption and greenhouse-gas emissions,” they added.

Another environmental feature of this series of new-generation LNG vessels is a partial re-liquefaction system, which allows cargo boil-off gas to be returned to the tanks.

Delivery of the carrier to the charterer is scheduled for the third quarter of 2023.

“We are pleased that SCF Group’s shipbuilding programme will be supplemented with a new gas carrier that meets all the current international standards regarding environmental protection, as well as the Charterer's requirements for energy efficiency, quality and navigational safety,” said Sovcomflot’s Tonkovidov.

“We are grateful to our valued partners at Total for the opportunity to participate in this interesting project which extends further our cooperation in LNG transportation with one of the world’s leading international energy companies,” added Tonkovidov.

“The success in Total’s project tender once again demonstrates SCF’s high standards and capabilities in LNG shipping as well as with other types of energy,” stated the Russian company’s CEO.

He added that the continued development of energy transportation services that serve long-term projects provide a fixed return element to the shipping line’s business model.

“It is in line with the corporate strategy approved by our shareholders and allows us to reduce the negative impact of conventional tanker freight market fluctuations on the Company’s results,” Tonkovidov concluded.

The Russian shipping line is now listed on the Moscow stock exchange after an initial public offering in October 2020. 

Sovcomflot, the Russian shipping line with 31 gas carriers in operation or on order and an overall fleet of 145 vessels, is now listed on the Moscow stock exchange and more than doubled nine-month net profits as it looked ahead to future long-term Arctic LNG charter earnings.

A Russian joint venture involving fleet owner Sovcomflot and natural gas company and LNG developer Novatek has signed contracts with a Russian bank and Zvezda Shipbuilding in the Far East to construct and lease 10 ice-breaking Arc-7 class LNG carriers.

The venture called Smart LNG has simultaneously signed long-term time-charter agreements for these 10 vessels with the Novatek-led Arctic LNG II project.

In total, contracts for 15 such vessels have now been signed, including shipbuilding, financing with Russian bank Veb.Rf Group, leases and time-charter contracts.

The Arctic LNG II project 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 19.8 MTPA 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).

The contracts for the lead ship in the series were signed by Socomflot in October 2019 and the contracts for another four sister ships were signed by Smart LNG in January 2020.

Sovcomflot, also known as SCF, continues to implement its strategy, with the goal of steadily growing the company’s value through expanding its portfolio of long-term industrial shipping contracts.

“The company point as a special focus on operations in challenging climatic and ice conditions,” said Sovcomflot.

“With 10 long-term time charters added to this portfolio, SCF $20 billion in contracted future earning and receivables,” stated the Russian shipping line.

The vessels will be operated under the Russian Federation flag and the Russian Maritime Register of Shipping (RS) will provide supervision during the construction of the vessel series.

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 and time charter contracts for 15 Arc7 LNG carriers, 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,” said Igor Tonkovidov, President and Chief Executive of Sovcomflot.

“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,” explained Tonkovidov.

“We are pleased to see that this new generation of Arctic LNG carriers, 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,” stated the Sovcomflot CEO.

Sovcomflot bases its success in developing long-term partnerships with key customers, including Gazprom, Novatek, Lukoil, Royal Dutch Shell, French major Total, Exxon Neftegaz and Sakhalin Energy.

The Russian line’s fleet comprises 146 vessels with a total deadweight of 12.6 million tonnes, including ships owned through joint ventures. More than 80 vessels have an Ice classification.

Sovcomflot, the Russian shipping line with 16 LNG carriers and an overall fleet of 147 vessels, said its revenues rose by 5.7 percent in the third quarter amid expectations more newbuilds will be ordered to deliver cargoes from the second Arctic LNG export plant proposed by Novatek and its international partners.

Russian shipping line SCF Group and a Russian financial institution signed an agreement for lease-financing of the first ship in a series of ice-breaking liquefied natural gas carriers expected to be built to serve the Arctic LNG II project in northern Siberia.

Sovcomflot, the Russian shipping line with 14 LNG carriers and two others on order, has reported a rise in first-quarter time-charter revenues and turned a profit as it also introduced LNG-powered vessels to its tanker fleet.

Sovcomflot, the Russian shipping line, has organized financing for two new liquefied natural gas carriers to increase its LNG fleet to 16 vessels as Russia expands its presence in the sector with more projects.

Sovcomflot Group, the Russian shipping line with 12 liquefied natural gas carriers in its fleet, narrowed its annual net losses as charter rates improved for LNG and energy trading sectors amid continuing difficult conditions during mid-2018.

Russian shipping line Sovcomflot has placed an order at Zvezda Shipbuilding for construction of three new generation product carriers powered by liquefied natural gas as their primary fuel.