Sovcomflot may become the owner of four more LNG tankers for NOVATEK's gas projects. According to Kommersant, it refers to ice-class vessels Arc4 for the Arctic LNG-2 project, designed to transport gas from transshipment points in Murmansk and Kamchatka. The order will be placed at the South Korean shipyard Samsung Heavy Industries. Delivery of finished tankers will start in 2023.
As Kommersant learned, Sovcomflot (SCF) and NOVATEK in the second half of September may conclude a long-term time-charter contract for four Arc4 ice-class liquefied natural gas (LNG) tankers. At the end of August, the head of Sovcomflot, Igor Tonkovidov, said that SCF had won the corresponding tender of a "large gas company" in late August, without giving details.
According to Kommersant's information, NOVATEK plans to use these vessels to transport gas from the transshipment complexes currently under construction in the Murmansk Region and Kamchatka, which are planned to be commissioned in early 2023.
As a result of the launch of these transshipment points, the company will be able to reduce the transportation distance and thus the required number of expensive Arc7 ice class tankers. Arc4 tankers are significantly cheaper and will be able to deliver gas from the transshipment point to the consumer: to the ports of Western Europe and Northeast Asia, respectively. The complexes in Murmansk and Kamchatka will handle gas from both NOVATEK's current Yamal LNG project and the larger Arctic LNG-2 (three lines of 6.6 million tons each). The first line may be launched in 2023, the second in 2024 and the final in 2025.
Sovcomflot will construct these four vessels at the South Korean shipyard Samsung Heavy Industries (SHI). Delivery time is from 2023. Kommersant failed to find out the cost of the contract, however Sovcomflot reported in May that it would build two similar vessels for Total, a shareholder of Arctic LNG-2, for 182.6 million dollars apiece. For reference: another Korean shipyard DSME is building Arc7 gas carriers for NOVATEK for 283 million dollars (see Kommersant dated October 15, 2020).
According to Tradewinds, the contract between NOVATEK and Sovcomflot may contain an option for two more tankers. Besides, according to the publication, NOVATEK may place an order for two more similar vessels (also with an option) on DSME. Sovcomflot declined to comment, NOVATEK did not respond to a request.
Sovcomflot is gradually becoming a key partner of NOVATEK in the export of gas from the company's Arctic projects. Thus, Sovcomflot will become the largest carrier for the Arctic LNG-2 project on Arc7 tankers - the company ordered one such tanker independently for Zvezda, three for DSME and another 14 units within the framework of a joint venture with NOVATEK Smart LNG.
One of the benefits of Arc4 class tankers over Arc7 class vessels is their lower cost and lower operating costs, notes Mikhail Grigoriev, head of the Gekon consulting center. Moreover, the expert explains, such vessels can be operated to transport LNG from NOVATEK projects in the Arctic to future terminals of the seaport of Murmansk all year round, only in some cases requiring icebreaker support. In his opinion, the vessels ordered from Sovcomflot can serve as a safety net for NOVATEK if the Arc7-type vessels currently under construction are commissioned later than planned. “If the ice-class Arc7 vessels under construction at the Russian "Zvezda" and at the South Korean shipyard are delivered on time, they themselves will provide year-round gas transportation to the sea transshipment complex in the Bechevinka Bay (in Kamchatka -"Kommersant") of all products of the three stages of the project Arctic LNG-2,” stresses Mr. Grigoriev. If the deadlines are met, LNG tankers of Arc4 class from Sovcomflot can also be used to export additional gas from the Yamal LNG and Obskiy LNG projects, if the latter eventually has an LNG component.