Novatek Looks to Order LNGCs Abroad: Press

Novatek wants to order the 10 LNG carriers (LNGCs) needed for one of its new Arctic export projects from foreign shipyards, going against Russia’s drive to develop its own shipbuilding industry, Kommersant reported on December 19.

The gas company’s head Leonid Mikhelson explained in a letter to Russian president Vladimir Putin last month that the Zvezda shipyard in the Far East would not be able to handle the extra orders, Kommersant claimed. Zvezda is already due to build 15 LNGCs for Novatek’s 19.8mn mt/yr Arctic LNG-2 plant, scheduled to start up in 2023.

The extra 10 vessels are to serve Novatek’s 5mn mt/yr Obsk LNG plant. Obsk LNG is also expected up and running by 2023, although the project is yet to be officially sanctioned.

“The construction of an additional fleet within this timeframe can only be carried out at foreign shipyards,” Mikhelson said in the letter, adding that the orders would need to be made “in the near future.”

There is no law preventing Novatek from using foreign shipyards to build the Arc7 ice-breaking LNGs it needs to ensure year-round delivery from Obsk LNG. But doing so is at odds with Russia’s import substitution programme championed by Putin. Novatek has said it wants to limit the use of foreign technology and equipment at Obsk LNG as much as possible, with the plant set to showcase the company’s own Arctic Cascade liquefaction technology.

Zvezda, a joint venture between Russia’s state-owned Rosneft and Gazprombank, has also been commissioned to construct oil tankers and support vessels, mostly for use at Arctic projects.