LNG

The Russian authorities said that cargo transportations along the Northern Sea Route from Russia to Asia in the January-September 2021 period have amounted to 24.22 million tons, which is 3.5 percent more than in the same period last year.

Korea Shipbuilding and Offshore Engineering Co. (KSOE), the nation's largest shipyard group, has won orders to build seven liquefied natural gas carriers at a time of increased competition from Chinese shipyards.

The company said the orders were worth a combined 1.56 trillion won ($1.35 billion) in value and come at a time when the Korean industry was been winning a larger portion of global orders for all kinds of ships.

KSOE is a holding company of three shipbuilders comprising Hyundai Heavy Industries, Hyundai Samho and Hyundai Mipo Dockyard Co.

With the latest LNG newbuilds, KSOE said it had obtained orders for 176 ships and two offshore plants worth the equivalent of $16.8Bln so far this year, exceeding its annual order target of almost $15.0Bln.

The Korean LNG carrier orders are a mix from both Asian and European shipowners and covered all three subsidiaries.

South Korea had re-taken the global No. 1 ranking for monthly orders in May 2021 after losing it to China in April 2021, nine months after retaking the leading position in global shipbuilding in July 2020.

During the first part of 2021, Korean shipbuilders also won orders for 31 ships to be propelled by LNG, taking up 46 percent of 67 LNG-powered ships ordered in the year to date.

The Korean yards are still favoured by Russia in its LNG shipping expansion.

A Russian newbuild ordered from Hyundai Heavy Industries will be the latest in a series of Sovcomflot’s next-generation conventional Atlanticmax LNG carriers, with three sister ships already in operation, the “SCF La Perouse”, the “SCF Barents” and the “SCF Timmerman”.

The newbuild will have capacity of 174,000 cubic metres and be owned and operated by Sovcomflot, with options for HHI to build two additional vessels.

The newest Korean-built Russian vessel would be fitted with an X-DF propulsion system, operated by a slow-speed diesel engine with a direct drive to the propellers, enabling a substantial reduction in the vessel’s fuel consumption.

Sovcomflot said a keel-laying ceremony was held at the Zvezda Shipbuilding yard in Russia’s Far East for a new Arctic liquefied natural gas vessel ordered by the Russian tanker and LNG carrier fleet owner.

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.

Zvezda Shipbuilding in the Russian Far East has signed a technical assistance and license agreement with Gaztransport and Technigaz (GTT), the French designer of liquefied natural gas maritime and onshore storage systems, to build ice-breaking LNG carriers using GTT tanks.

The Northern Sea Route (NSR) from Arctic Russia to North Asia has reopened earlier than in recent years, providing scope for LNG shipments to be re-directed from the Atlantic Basin to Pacific Basin as prices remain low, though are rising faster in Asia.

The NSR is officially defined by Russian legislation as lying east of Novaya Zemlya archipelago and specifically running along the Russian Arctic coast from the Kara Sea to the Bering Strait to enter the Northern Pacific Ocean.

The 172,600 cubic metres capacity Arctic-class LNG carrier “Christophe de Margerie” left the Yamal LNG export plant in Northern Siberia, operated by Novatek, on May 18 and is scheduled to arrive at the Chinese Tangshan import terminal on June 11 after a transit of 23 days.

The Tangshan terminal is in the northern Chinese Hebei province and is operated by PetroChina.

Shipping data shows that the “Christophe de Margerie” is accompanied by another tanker and two nuclear-powered ice-breakers, the “Yamal” and the “Vaygach”.

It is only in recent years that the NSR has started to be used earlier by LNG carriers pushing ahead to deliver cargoes to North Asia.

The 172,600 cubic metres capacity LNG carrier “Vladimir Rusanov” was the first vessel to use the NSR in 2019, having lifted a cargo at the Yamal plant in mid-June.

However, the “Vladimir Rusanov” is in Western European waters and scheduled to discharge a cargo on May 24 at the Montoir-de-Bretagne terminal in Western France.

According to analysts, the early availability of the NSR, coupled with a slowly opening Europe-Asia LNG arbitrage window - at historically low values - will result in a redirection of many Yamal cargoes away from Europe and to be pointed at North Asia.

Three other carriers are currently heading back to the Yamal plant's port at Sabetta from Europe and at least one could lift an Asia cargo.

They are the two 172,000 cubic metres capacity vessels, the “Georgiy Brusilov” and the “Vladimir Vize”, and the 172,600 cubic metres capacity carrier “Vladimir Voronin”, with arrivals scheduled before the end of May, according to shipping data.

The re-opening of the NSR comes as the Platts Japan-Korea Marker spot cargo price for North Asia cargoes for July is at $2.280 per million British thermal units and at $2.425 per MMBtu for August, higher than several weeks ago.

That’s as the European LNG price indicators, the UK National Balancing Point and the Dutch Title Transfer Facility, were lower at the equivalents on May 20 of $1.40 per MMBtu and $1.55 per MMBtu respectively.

There is currently a wider debate in Russia about accommodating much more energy shipping traffic on the NSR as usage increases.

Russian oil company Rosneft is progressing with the development of its Vostok Oil Project, a venture that is projected to deliver 25 million tons of shipments from a special seaport via the NSR by 2024.

The oil project is based on the development of several fields, including at least three in the Vankor area.

Vostok Oil will also include the development of 15 new industry towns, two airports and about 800 kilometres of new pipelines.

The traditional NSR that has been the main reference point in Russian Arctic shipping is now being debated by the government.

Growth in shipments on a wider route have been rising. Russian government data shows that in 2019, a total of 31.5 million tons of shipments were transported on the NSR, an increase of over 55 percent from 2018.

Most of the extra shipments were LNG from the Yamal plant.

Now the Russian government is referring to the Northern Sea Transport Corridor and has drawn up a report on increasing traffic volumes.

According to the Association of Sea Trade Ports, the transport corridor will be clearly referred to in the new Russian Arctic Strategy, a document that now awaits approval by the government.

The document has been written by the Russian Ministry of the Far East and Arctic and was submitted to the government on 7th of May 2020. The strategy covers the period until 2035.

April 9 (LNGJ) - Sovcomflot, the Russian shipping line with 16 liquefied natural gas carriers and an overall fleet of 147 vessels, pledge to further expand its portfolio as the board met to approve the annual report and recommend the allocation of 7.18 billion Russian rubles (US$95.6 million) in yearly dividend payments. Time charter equivalent revenue had increased by 17.8 percent to exceed US$1.27 billion while net profit was over US$225 million.

   “We are pleased that the large-scale cooperation between Sovcomflot and Russia's leading energy companies is facilitating domestic construction of state-of-the-art LNG carriers and LNG-fuelled Aframax and MR tankers,” said Igor Tonkovidov, President and Chief Executive of Sovcomflot. “The total value of shipbuilding orders placed by SCF Group at the Russian yards has already exceeded US$1.5Bln,” he added at the meeting.

Sovcomflot, the Russian shipping line with 16 LNG carriers and an overall fleet of 142 vessels, said one of its LNG-powered Aframax crude oil tankers successfully completed a commercial voyage along the Northern Sea Route (NSR) from Russia to Asia.