RF Ministry of Industry and Trade is to monitor the effective utilization of the budget allocations

Under RF Government’s order No 3664-r dated 17 December 2021, the Ministry of Industry and Trade will be provided with RUB 4.1 billion in 2021 for the second and the third phases of the shipbuilding project that foresees the construction of 15 gas carriers for Arctic LNG 2. The document has been published on the Official Internet Portal of Legal Information.

“With the purpose of shipbuilding development, RUB 4,116,595,400 of budget resources is to be provided in 2021 to the Ministry of Industry and Trade from the Reserve Fund … for a partial covering of expenses on construction of large-capacity ships as subsidizing of the second and the third phases of the shipbuilding project on construction of 15 gas carriers for Arctic LNG 2”, reads the document.

The Ministry of Industry and Trade undertakes signing of an agreement on subsidizing within 10 working days from the effective date of the Order.

Besides, the Ministry of Industry and Trade is to monitor the effective utilization of the budget allocations.

The report is to be submitted to the Government before 1 March 2022.

The contracts for construction of 15 Arc7 ships intended for shipment of cargo from Arctic LNG 2 facilities were signed by SC Zvezda and VEB.EF companies in December 2019 – July 2020.

15 gas carriers will be built by Zvezda shipyard (Bolshoy Kamen, Primorsk Territory).  The ships will be operated under long-term time-charter contracts between SMART LNG, a joint venture between PAO Sovcomflot and PAO NOVATEK, and Arctic LNG 2, a subsidiary of NOVATEK.

Arctic LNG 2 envisages constructing three LNG liquefaction trains of 6.6 million tons per annum each, as well as cumulative gas condensate production capacity of 1.6 million tons per annum. The total LNG capacity of the three liquefaction trains will be 19.8 million tons. The Project utilizes an innovative construction concept using gravity-based structure (GBS) platforms to reduce overall capital cost and minimize the Project’s environmental footprint in the Arctic zone of Russia.

The Project’s participants include: NOVATEK (60%), TOTAL (10%), CNPC (10%), CNOOC Limited (10%) and the Japan Arctic LNG, consortium of Mitsui & Co., Ltd.  and JOGMEC (10%).

According to earlier statements, RF Government’s Order No 3519-r dated 10 December 2021 foresees allocation of over RUB 890 million from the Reserve Fund for completion of the second phase of the gas tanker construction for the Arctic LNG 2 project.

Image source: SC Zvezda
Source: PortNews