In a significant step to expand Russia’s domestic shipbuilding portfolio the Zvezda shipyard has completed work on its first LNG vessel. Ice-capable gas carrier Aleksey Kosygin departed from the yard near Vladivostok for sea trials on December 25. It is the first LNG carrier completed by a Russian yard, though key parts of the vessels were constructed in South Korea.
The vessel will become part of the fleet to service Russia’s flagship LNG plant, Arctic LNG 2. The project has been plagued by delays due to escalating Western sanctions. Majority owner Novatek has struggled to secure ice-capable shipping capacity to service the project during winter. The company has thus far also been unable to find buyers for its LNG.
Originally Arctic LNG 2 was designed to rely on a fleet of 21 ice-capable LNG carriers for year-round transport via the Arctic; none of which have been delivered. The Arc7 LNG carriers – 300 meters long and 48.8 meters wide – are designed for year-round independent navigation along the Northern Sea Route. With a 45 MW power plant and powerful icebreaking capabilities they can travel through ice up to 1.7 meters thick.
Following sea trials Aleksey Kosygin is expected to enter service in early 2025. South Korean firm Samsung Heavy Industries (SHI) constructed the more challenging blocks of the vessel. The hull up to the forward cargo bulkhead was towed to Zvezda in October 2021. The vessel was completed at Zvezda, including the installation of the gas membrane through French manufacturer GTT and propulsion components by European supplies MAN and Wärtsilä.
SHI had been contracted to provide 15 hulls to Zvezda, but only delivered five of them before the sanctions environment prompted the cancellation of the contract in 2024. Over the past several years the five delivered hulls remained at various stages of construction prompting questions how many vessels Russia would be able to launch on its own.
The next LNG carrier in line will be Pyotr Stolypin, estimated to have been at a similar level of completion when Western companies departed from Russia. Pyotr Stolypin is expected to follow Aleksey Kosygin in the coming months. Both vessels, as well as the Zvezda yard, have been sanctioned by the U.S.
The future of the remaining three hulls is much less certain. GTT reportedly completed work on only the first two vessels when they ceased work at Zvezda in January 2023 to comply with the EU’s 8th and 9th sanctions package. Russia has been making strides in developing their own membrane technology to reduce the country’s dependence on Western technology, though its status remains uncertain.
With respect to tanker membranes, Russian company Segezha Group has developed its own brand of “tanker plywood” used in the membrane-type insulation panels. In 2022 Segezha was certified by GTT for use in its Mark III membrane. The product has already found application in the Chinese shipbuilding market and could likely aid in the completion of the membrane in the remaining Arc7 vessels, industry experts speculate.
U.S. LNG exports reached near record levels in December, rising to 8.5 million metric tonnes (MT) as two new plants started, and driving up full-year shipments 4.5% over 2023, according preliminary data from financial firm LSEG.
President Joe Biden is preparing to issue a decree permanently banning new offshore oil and gas development in some US coastal waters, locking in difficult-to-revoke protections for sensitive marine areas during his final weeks in the White House.
Cargo volume on Russia’s main Arctic shipping lane continues to climb, although figures remain below the targets originally defined by President Putin earlier in the decade. Western sanctions have delayed or put on hold a number of oil and gas projects negatively impacting overall cargo volume.
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