Sovcomflot, USC and Gazprom in LNG Shipbuilding Deal (Russia)

Today at Saint-Petersburg International Economic Forum, Sovcomflot has signed an agreement with United Shipbuilding Corporation (USC) on the reservation of construction slots for the placement of orders to build further gas carriers of the Velikiy Novgorod series.

Along with the agreement on the reservation of construction slots, OAO Sovcomflot concluded a memorandum of understanding with Gazprom Marketing and Trading, which provides for a construction order for up to 13 gas carriers from the enhanced «Gaz Ice» series under a future GM&T charter.

This series, consisting of two state-of-the-art gas carriers (Velikiy Novgorod and Pskov), was ordered by Sovcomflot in 2011 for operations under a contract with Gazprom Group. These Ice2 Atlanticmax class vessels have a cargo capacity of 170,000m³ and a diesel-electric propulsion system. They have improved technical characteristics and are capable of transporting liquefied natural gas from all existing LNG terminals, including Russia’s first LNG project – Sakhalin-II.

At present, the vessels in the Velikiy Novgorod series have the optimal specifications for ships of their type. The design of these gas carriers will now be developed further with the expansion of the series.

The vessels in the series have a range of competitive advantages and will be constructed at OAO USC facilities and those of another partner shipyard.

While retaining their cargo capacity of 170,000m³, the gas carriers will be fitted with a new ME-GI slow-speed dual-fuel diesel engine with direct drive, replacing the diesel-electric propulsion system.

This engine’s performance parameters will make it possible for the new vessels to work in any climatic or ice conditions. At the same time, improved propulsion system characteristics and an optimised hull shape will allow the ships to operate in open water with the same fuel consumption as non-ice-class vessels.

In contrast to the first series of vessels, the new gas carriers in the “Gaz Ice” series will have a higher ice class – Arc 4 (as classified by the Russian Maritime Register of Shipping). This will allow them to transport LNG via the Northern Sea Route during the summer period. The new vessels will also offer better efficiency than other similar gas carriers as they will be fitted with a cargo containment system that reduces levels of gas lost through evaporation to no more than 0.1% per day.

The agreement signed in Saint-Petersburg provides for the phased localisation of production at OAO USC facilities and the start of LNG carrier construction at Russian shipbuilding enterprises by 2018. Russia’s first gas carrier to be manufactured on home soil is expected to be built as early as 2020. These new vessels will transport fuel from existing (and future) Russian LNG terminals in the Far East and the Arctic.

Elaborating the design for the new vessels brought together specialists from Gazprom Marketing and Trading (GM&T), OAO Sovcomflot, the Russian Maritime Register of Shipping, and OAO USC.

“Expanding Sovcomflot participation in LNG transportation is one of the priority targets in our company’s development strategy. Today, the SCF fleet includes 6 LNG tankers and a further 6 carriers have been ordered and are currently under construction at the world’s leading shipyards. In collaboration with USC and its overseas partners, we were able to enhance the technical design of the vessels previously developed for Gazprom Group. This means that in the near future it will be possible to build gas carriers at Russian enterprises. In the long-term, we will continue to provide our partners with solutions that guarantee greater efficiency, reliability and environmental safety at sea. The memorandum we have signed represents a logical continuation of the mutual collaboration established between Sovcomflot and Gazprom Group and we are grateful to our partners for their trust and the opportunity to work together in bringing this project to fruition.” – Sergey Frank, President of OAO Sovcomflot.