Sovcomflot Secures Funds for LNG Newbuildings

Russia’s Sovcomflot said that it has signed a new USD 316 million 10 year credit facility with a consortium of three leading international banks: ING Bank N.V. (ING) of the Netherlands; KfW IPEX-Bank GmbH (KfW) of Germany and Sumitomo Mitsui Banking Corporation (SMBC) of Japan.

The funds will be used towards financing two new ice-class LNG carriers Velikiy Novgorod and Pskov, which will operate on long-term contracts with Gazprom Global LNG.

The new high-spec Atlanticmax Ice2 (1C) class gas carriers feature a tri-fuel engine, a cargo capacity of 170,000m³ and are equipped for operating in harsh and low temperature conditions. Their design is optimised to provide the utmost trading flexibility to their charterers. They are able to transport LNG year round to and from most of the world’s existing LNG terminals, including the ability to load cargoes at Russia’s Sakhalin-II terminal.

The project facility has a non-recourse structure and a favourable long-term tenor, as well as competitive pricing, reflecting the robustness of the deal structure, the stability of the charter hire revenue stream and cash flows, and the high credit quality of the charterer. The vessels will form part of Sovcomflot’s recently established company SCF Gas Carriers Ltd., the Group’s dedicated vehicle for its expanding gas transportation business.

Nikolai Kolesnikov, Senior Executive Vice-President & Chief Financial Officer, said:

“SCF Group is pleased to conclude this new long-term LNG financing with its three long-standing financial partners: ING Bank N.V.; KfW IPEX-Bank GmbH and Sumitomo Mitsui Banking Corporation. We very much value the involvement of these high profile lenders in this deal, reflecting their in-depth understanding of the transaction and their strong commitment to SCF Group. SMBC were behind our first entry into LNG operations back in 2006, our relations with ING go back over twenty years, and we are very pleased to welcome back to our core group of financiers KfW, whose lending history with Sovcomflot goes all the way back to the time of its incorporation in 1988.

“This is the third successful international debt financing accomplished by SCF Group in 2013, which further strengthens the Group’s liquidity position and, despite challenging conditions in the global financial and shipping markets, enables it to address its upcoming financial requirements. We are very grateful to all our financial partners for their ongoing support towards the growth of our business.”

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LNG World News Staff, December 17, 2013; Image: SCF