Daewoo Shipbuilding & Marine Engineering could net orders for up to 12 Arc7 LNG carrier newbuildings worth around $4bn in an upcoming order from Russian energy company Novatek and its associates.
Industry sources revealed that contract signings are “imminent” for six firm LNG newbuildings at the South Korean shipbuilder in a deal that will include options for four more vessels plus a separate pair of ships.
But they said these optional vessels could also go to Hudong-Zhonghua Shipbuilding (Group) if the Chinese shipbuilder chooses to compete with DSME for the ships.
TradeWinds reported last month that a Novatek order for up to 10 vessels would be split equally between the two yards, with DSME inking five firm vessels and Hudong-Zhonghua firming up a similar number of ships later in the year.
Those close to the business said DSME has proved particularly competitive in its pricing and is keen to take on all of the newbuildings.
DSME, which recently scooped a job to build two giant floating storage units for the Russian Arctic, was the first to construct Arc7 LNG carriers. The yard built the raft of 15 vessels that now serve the Novatek-led Yamal LNG project. These vessels were priced at about $340m each.
Novatek has also approached selected shipowners with a request for proposals on these next-up newbuildings. The list is believed to include owners that worked on shipping for Novatek’s Yamal LNG.
It has also emerged that the anticipated LNG newbuildings will be Arc7 ice-class vessels — not conventional LNG carriers or ships of lower ice class.
If confirmed, the DSME vessels will be in addition to the 15 Arc7 LNG carriers that Novatek-Sovcomflot joint venture Smart LNG expects to contract at Russia’s emerging Zvezda Shipbuilding Group.
To date, five of these vessels have been firmed up. Contracts on another 10 are expected. Rival South Korean shipbuilder Samsung Heavy Industries is working with Zvezda on these newbuildings.
Together, these orders would give Novatek access to 27 Arc7 LNG carriers.
The Russian company is pursuing several Arctic-based LNG projects that would see it exporting LNG on a year-round basis via the Northern Sea Route.
Last week, Novatek held a video conference with the chief executives of partner companies in its 19.8 million tonnes per annum Arctic LNG 2 project.
Novatek said Arctic LNG 2 is now 19% complete and on schedule for its start-up in 2023, despite the impact of the ongoing Covid-19 pandemic.
The company is building three gravity-based structures (GBS), fitted with membrane-type LNG tanks, that will house the project’s liquefaction units. The concrete casing on the first GBS is 37% complete.
Novatek management board chairman Leonid Mikhelson said: “This unique project employs an innovative construction concept using gravity-based structures, or GBS, a logistical scheme with year-round navigation via the Northern Sea Route, as well as extensive localisation of equipment and materials manufacturing in Russia.”
In addition to this project, Novatek is also working on the smaller 4.8-mtpa Obsky LNG project and Arctic LNG 1 and 3, which could see a combined 70 mtpa of LNG being exported from the region.
