SCF President Meets Vladimir Putin (Russia)

Russian President Vladimir Putin meets with OAO Sovcomflot President Sergey Frank. Issues discussed during the meeting included: the implementation of the shipping company’s development strategy, Sovcomflot participation in large-scale offshore projects in Russia and overseas, and the furthering of cooperation with large Russian oil & gas companies and shipbuilding enterprises.

On 6 August, Russian President Vladimit Putin met with Sergey Frank, CEO of Sovcomflot – the country’s largest shipping company and a world leader in oil & gas transportation. During the meeting, the Russian President was briefed on the implementation of the enterprise’s development strategy.

Sergey Frank noted that despite the continuing 5-year recession on the global tanker market, OAO Sovcomflot has demonstrated the stability of its business model and the consistency of its financial results. This has been made possible thanks to a well-balanced development strategy aimed at furthering growth across a range of high-demand sectors within the Russian oil & gas industry. In the last seven years, the company’s fleet has grown by almost three times – a deadweight increase from 4.4 million to 12 million tonnes. Today, the company has one of the youngest and most technically advanced fleets in the world, consisting of 160 specialised vessels. A third of these vessels are of a high ice class and have been specially designed for operations in areas with challenging icy conditions. Over the last seven years, SCF has gained ground in several promising segments of the transport sector, such as: the maritime transportation of liquefied natural gas, shuttle tanker shipping of crude oil (including in Arctic and sub-Arctic conditions), offshore platform support, and maritime geophysical exploration.

The main focus of the SCF Group development strategy, as approved by the company’s board of directors, is on the continued diversification of the enterprise’s business project portfolio. First and foremost, this concerns Russian projects in the sphere of liquefied gas transportation and the development of hydrocarbon resources on the continental shelf.

Sovcomflot vessels currently provide safe shipping for all of the crude oil and most of the liquefied natural gas from the largest Russian oil & gas projects: Sakhalin-I, Sakhalin-II, and Varandey. The fleet is also ready to commence oil shipping operations as part of the Prirazlomnoye project.

At the end of July this year, multifunctional icebreaking supply vessel Alexey Chirikov commenced work as part of the Sakhalin-I project (the first ship Vitus Bering is already in operation on the project). Both vessels were built as part of a joint venture involving Russian and Finnish shipbuilders.

Several days ago, Sovcomflot’s geophysical exploration vessel Vyacheslav Tikhonov started work at the Kirinsky field (Sea of Okhotsk) under contract with OAO Gazprom.

As part of expanding collaboration with Russian petrochemical holding SIBUR, SCF has brought gas carrier Sibur Voronezh into active service for the transportation of liquefied petroleum gas (LPG). This is the first vessel in a series of two high ice class LPG carriers ordered by Sovcomflot. These gas carriers are intended for the year-round export of LPG from the port of Ust-Luga (Leningradsky Region).

On 3 August, Sovcomflot tanker SCF Yenisei set out on a crossing of the Northern Sea Route carrying a cargo of light oil products. This marked the next stage in preparations for the upcoming development of hydrocarbon fields in the Russian Arctic, which SCF if conducting in close collaboration with oil & gas companies, FGUP Atomflot and the Russian Ministry of Transport.

Sovcomlot is both the Russian and global leader in hydrocarbon shipping in challenging climatic conditions and the company continues to specialise in this segment. Over the last several years, SCF has gained further navigation experience in the harsh climatic conditions of the Arctic and is now elaborating new transport technologies and alternative global export routes for Russian raw stock, including to promising, rapidly developing markets in the Asia-Pacific region.

OAO Sovcomflot is one of the largest clients for civil shipbuilding in the Russian Federation and is a constant partner of OAO United Shipbuilding Corporation. In recent years, SCF has placed orders for new vessels with Russian shipyards totally over 22 billion roubles. In addition, SCF placed orders for the construction of 8 vessels worth approximately 19 billion roubles as part of an OSK joint venture with Finnish and Korean shipbuilders. A range of agreements were signed with OSK and OAO Gazprom to ensure Russian shipbuilding enterprises gained access to the latest technologies used in the construction of large-tonnage gas tankers for the transportation of liquefied natural gas (LPG). As part of these agreements, a pilot project will be implemented to trial the use of gas-engine fuel in low-speed propulsion systems during Northern Sea Route crossings.

At the end of last month, Sovcomflot and Gazprom signed a Memorandum of Understanding that provides for a construction order for up to 13 state-of-the-art LNG carriers to be engaged in operations as part of new Russian offshore projects. This agreement also provides for the phased localisation of construction work on these modern vessels in Russia at facilities being built by OSK. Russia’s first LNG carrier could be launched as early as 2017.

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LNG World News Staff, August 26, 2013; Image: SCF