Russia: Sovcomflot Orders Two LNG Carriers from STX Offshore & Shipbuilding

Sovcomflot (SCF Group), the largest operator of ice-class LNG carriers, confirmed its global leadership position by placing orders for two ultramodern ice-class LNG-carriers, that will be used by Gazprom Global LNG Limited (GGLNG) for LNG transportation.

A long-term time-charter contract is expected to be signed by the parties, during the World Economic Forum at St. Petersburg in June 2011.

GGLNG, a subsidiary of Gazprom, announced that SCF Group has been chosen to operate two new LNG carriers on a long-term time charter of minimum 15 years for both vessels. The selection process organised by GGLNG, from which SCF Group emerged as the successful company, involved detailed negotiations with many of the worlds’ leading LNG shipping companies.

Construction of the vessels will be carried out at the STX Offshore & Shipbuilding shipyard (South Korea), with participation from the Russian Shipbuilding Corporation (OSK). Delivery of the first vessel is scheduled for the fourth quarter of 2013, with the second vessel to follow in the second quarter of 2014. The choice of shipyard was the result of a tender held in accordance with SCF Group’s existing procedures for the conclusion of shipbuilding contracts. In the light of this, the proposal made by STX Offshore & Shipbuilding was found to be optimal.

The winning ship design for “Atlantic-max” type carriers (cargo capacity 170.000 cubic meters and tri-fuel diesel-electric propulsion), with ice2 class (Russian Maritime Register of Shipping) and winterisation enhancements, was the most sophisticated of those proposed. It incorporates all the latest requirements in terms of environmental protection, energy efficiency, crew accommodation and working conditions as well as vessel safety. The multifunctionality of this project is proven by the ability to operate the proposed ships between almost all existing LNG terminals, including the possibility to offer year-round gas exports from Russia’s first LNG project – Sakhalin-2, and in the future – from the Shtokman LNG project terminal.

The cargo system (a reinforced membrane structure) meets the requirements of operating in harsh climatic conditions. This is documented by tests carried out jointly by specialists of the Russian Maritime Register of Shipping and the Krylov Shipbuilding Research Institute. According to industry experts from RMRS, the Krylov Institute and OSK, the design is the most technologically advanced and least costly option for the future development of Russia’s LNG production facilities. Due to the early delivery dates, it is not possible to arrange construction of the vessels in Russian shipyards, but with the prospective order of similar ships in the series for the Shtokman gas condensate and other fields, domestic production of such vessels will be realised in due course.

The project envisages cooperation not only with the Russian shipbuilders – “OSK” as well as domestic equipment and component suppliers, but also joint work with the Makarov Maritime Academy, that will provide training programmes for the future crews of these ships.

Sovcomflot’s President & CEO, Sergey Frank, said: “We are absolutely delighted to announce this agreement. Our team of experts did an excellent job, as some of the World’s largest shipowners presented offers to GGLNG. In the end, Sovcomflot’s proposal provided the best value for money and a truly innovative solution, incorporating a unique and technically advanced ship design, with construction options involving Russian shipbuilding companies. The contract signing is a logical extension of the close working partnership formed with Gazprom over the past few years, and a cooperation agreement between us on LNG seaborne transportation, signed in June 2010. Our aim is to offer our partners seaborne energy solutions that combine optimal performance with reliable and environmentally safe transportation.”

Frédéric Barnaud, Executive Director, GM&T and Managing Director, GGLNG said: “The addition of two highly sophisticated LNG vessels to our chartered fleet in 2013-14 will be a very important step towards the implementation of the Gazprom’s growth strategy across the entire LNG value chain. It will ensure the long-term security and efficiency of LNG transportation which will complement our discussions with LNG suppliers and customers worldwide.”

Nikolai Grigoriev, Director of Global Shipping & Logistics, GGLNG added: “We are particularly delighted to have this opportunity to develop a long-term relationship with Sovcomflot, the world’s leading gas, oil and product tanker owner and operator based in Russia. Our partnership with Sovcomflot will not only provide GGLNG with a high quality and competitive shipping services, but will also support the implementation of various strategic Russian content initiatives in shipbuilding and design, LNG expertise development, training and job generation in the Russian Federation.”

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Source: Sovcomflot, June 6, 2011