Final agreements have been signed on a series of 10 Arc7 LNG carrier newbuildings for Smart LNG that will be built in Russia at Zvezda Shipbuilding Complex.
Industry sources following the specialised newbuildings said the leasing agreements on the ships were inked last week, just a fortnight after shipbuilding contracts on the vessels were concluded.
Russia’s VEB.RF is understood to be providing financing.
The finalisation of the leasing agreements means the shipbuilding contracts reported by TradeWinds earlier this month now become effective.
The conclusion of the order gives Smart LNG — a joint venture between Russian energy company Novatek and compatriot shipowner Sovcomflot (SCF Group) — a total of 14 Arc7 LNG carriers on order at Zvezda.
Smart LNG finalised contracts for four Arc7s in February.
The yard is also contracted to build its first Arc7 vessel for Sovcomflot in a deal that was concluded last year.
South Korean shipbuilder Samsung Heavy Industries is partnering Zvezda on these 15 orders, which will be the Russian yards first LNG newbuildings. SHI is expected to build the hull blocks, with assembly and completion of the newbuildings taking place in Russia.
The ships will be used to lift cargoes from Novatek’s under-construction, 19.8-million-tonnes-per-annum Arctic LNG 2 project and other planned liquefaction developments in the Arctic region.
All eyes
All eyes will now turn to DSME, where Novatek has been in talks on a further series of up to 12 Arc7 LNG carriers.
The Zvezda 10, which were originally due to be inked in the first quarter of this year, were bumped back to the head of the queue last month just as DSME was limbering up to conclude its vessels.
DSME is expected to win orders for at least six firm vessels plus a number of optional vessels. China’s Hudong-Zhonghua Shipbuilding (Group) may also take a share of the 12 ships.
Novatek, which already operates the soon-to-expand, 16.5-mtpa Yamal LNG, has ambitious plans to develop its Arctic LNG production to 70 mtpa. Russia is developing the Northern Sea Route to facilitate the shipment of these cargoes.
