Russia’s VEB To Fund LNG-Fuelled tankers

State-owned Sovcomflot secured June 7 financing from Russia’s state development bank VEB for the construction of three new LNG-fuelled tankers.

Russia’s largest shipping company initially placed an order for the vessels with the Zvezda Shipyard at the end of December. They are scheduled for delivery in 2022-2023, Sovcomflot said.

Each tanker will have a deadweight of 51,000 metric tons and they are intended to transport petroleum products and gas condensate, operating under 20-year time charter agreements with Novatek, which produces and markets condensate as well as gas.

The vessels will have an Ice Class 1B classification, enabling them to provide safe and reliable year-round transportation for hydrocarbons in challenging ice conditions, in particular within the Baltic Sea.

Sovcomflot agreed with Novatek and Chinese partners earlier on June 7 to co-operate on transporting hydrocarbons from Russia’s Arctic zone to the Asian Pacific Region and via the Northern Sea Route between Asia and western Europe. The company has identified LNG as a core segment in its long term strategy.

“The company already successfully operates six new-generation Aframax tankers, which are powered by LNG fuel. Five more LNG-powered vessels have been ordered by Sovcomflot from the Zvezda shipyard and will be built over the next few years,” noted Sovcomflot CEO Sergey Frank.

VEB Leasing specialises in funding transportation. It previously participated in financing the Sovcomflot’s Aframax tankers.