Novatek, Sovcomflot Partner up to Build LNGCs

Russia’s largest LNG exporter Novatek has signed a heads of agreement with state shipping group Sovcomflot on forming a joint venture to build and operate ice-class LNG carriers.

The joint venture, which may bring in additional partners, will ensure “the optimised transportation” of LNG from Novatek’s future projects in the Arctic, Novatek said in a London stock filing on September 4. This includes its 19.8mn mt/yr Arctic LNG-2 terminal on the Gydan Peninsula, due to start up in 2023.

Novatek did not say what other partners might join the venture, although in June, it signed a preliminary pact on jointly developing icebreaking LNG carriers with Sovcomflot, Chinese shipping giant Cosco and Beijing’s state-run Silk Road Fund.

Optimising LNG transport will ensure success at Arctic LNG-2 and help Russia reach its goal of raising annual cargo shipment along the Northern Sea Route (NSR) to 80mn mt by 2024, Novatek CEO Leonid Mikhelson commented.

“The efficient development of the Northern Sea Route as a viable, year-round navigational route requires consolidating experience in ice navigation, applying new technological solutions, and implementing the best international standards for navigational safety and training,” he said.

In related news, Sovcomflot reported on September 3 that its Korolev Prospect Aframax vessel had become the first LNG-fuelled oil tanker of its size to complete the entire NSR. The ship, which is carrying oil from Murmansk to China, started on the route between Cape Zhelaniya to Cape Dezhnev on August 26. It took seven days and six hours to complete.