Russian Joint Venture Orders 10 LNG Carriers for Arctic LNG 2 Project

File photos shows the first Arc7 icebreaking LNG carrier, Christophe de Margerie, delivered in 2017 to support the Yamal LNG project. File photo: Shutterstock / Koptyaev Igor

A joint venture involving Russian firms SCF Group and NOVATEK has placed an order for 10 icebreaking LNG carriers to support the Arctic LNG 2 project along the Northern Sea Route.

In total, contracts have now been signed for 15 Arc7 LNG carriers to support the project, including shipbuilding, financing, lease, and time charter contracts.

For the latest 10 vessels, contracts have been signed with Zvezda Shipbuilding Complex to construct the vessels with financing from VEB.RF Group. The vessels will all be operated under the Russian flag.

SCG Group and NOVATEK formed the SMART LNG joint venture in September 2019 to own and operate a fleet of LNG carriers serving the Arctic LNG 2 project. The project includes the construction of three LNG trains with a combined capacity 19.8 million tonnes per year of stable gas condensate. Natural gas will produced from the Utrenneye field, located across the Ob Bay from the Yamal LNG project.

“Shipbuilding and time charter contracts for 15 Arc7 LNG carriers, signed between 2019-2020, enable the Russian shipping community to play a role in transporting cargoes of strategic importance for the Russian economy, which are generated by large-scale energy projects in the Russian Arctic,” said Igor Tonkovidov, President and CEO of SCF Group.

“These contracts will also help to further develop our national expertise in ice navigation and create over 850 new jobs for Russian seafarers, as all the 15 vessels will have Russian crews. We are pleased to see that this new generation of Arctic LNG carriers, which will contribute significantly to growing the cargo traffic along the Northern Sea Route, was designed based on SCF’s long-standing experience of safely operating vessels in ice conditions. Equally significant is the fact that the cooperation between SCF, NOVATEK, VEB.RF Group and Russian shipbuilders paves the way for establishing the domestic production of LNG carriers, which entails adopting advanced technologies and engineering solutions,” Tonkovidov added.