Russian Firms Agree to Develop Arctic Shipping in Northern Sea Route

Christophe de Margerie LNG carrier
File photo shows the Arctic LNG carrier Christophe de Margerie. Photo: Koptyaev Igor / Shutterstock.com

Russian independent gas producer NOVATEK and state-owned maritime shipping company Sovcomflot have agreed to a strategic partnership to develop maritime shipping support for Novatek’s Arctic gas projects including Yamal LNG and the Arctic LNG-2 project. 

Under a strategic partnership agreement signed this week, the two Russian companies will develop efficient logistical solutions for shipping oil and gas products through the Arctic. 

“Our unique partnership with Sovcomflot will optimize our LNG transport model through the Arctic zone by efficiently and effectively using ice-class tankers” according to NOVATEK’s Chairman of Management Board Leonid Mikhelson. “To implement our long-term development strategy to produce more than 55 million tons of LNG by 2030, we need to establish an efficient Northern Sea Route shipping model. Combining our efforts with Sovcomflot, one of the global leaders in navigation in harsh ice conditions will allow us to achieve maximum efficiency in managing our transportation costs.”

PAO Sovcomflot and PAO Novatek have worked together on a number of projects in the past. 

In 2010, the two companies partnered on the tanker SCF Baltica’s transit of the Northern Sea Route, the first large-capacity vessel to make the transit. From 2014 to 2016, they also partnered on the construction of the Christophe de Margerie, the world’s first Arctic LNG carrier. In December 2017, Christophe de Margerie transported the first cargo of gas lifted from the new $27 billion Yamal LNG liquefaction and export plant in the Russian Arctic. 

“Working with Novatek on this new strategic partnership, which is of a major national economic significance, our experts will bring to the table their specialist knowledge and engineering expertise,” said Sergey Frank, CEO of Sovcomflot. “Their skills have been honed, tried and tested over many years of efficient and safe operation of ice-breaking tankers – vessels purpose built for Sovcomflot to provide the mission critical logistics for major oil and gas projects in Russia’s Arctic, comprising Varandey, Prirazlomnoye, Novy Port, and Yamal LNG.”