Novatek has asked shipowners for offers on up to six LNG carrier newbuildings worth over $1bn in total as it moves forward with the development of its Arctic LNG 2 project.
The company has sent out a request for proposals for four firm ships with options on a further two.
The LNG carriers are specified as up to ice-class 3, a relatively low notation when compared to the Arc7 ice-breaking LNG fleet Novatek will also operate.
The company is understood to be asking for a relatively fast response on offers and is seeking delivery dates from 2023 onwards.
Familiar faces
Those following the business said the shipowners being asked to offer in on the vessels are largely those that Novatek has worked with before on the ships it has on long-term charter for its Yamal LNG project in the Arctic and upcoming newbuildings for Arctic LNG 2.
For Yamal, the company has 15 Arc7 LNG vessels chartered in from owners Sovcomflot (SCF Group) Mitsui OSK Lines and its partner China Cosco Shipping LNG, Teekay working with China LNG Shipping, and a tie up of Dynagas, Sinotrans and China LNG Shipping.
Alongside these 15 ice-breaking ships for the 16.5 million tonnes per annum Yamal project, Novatek also took a further 11 conventional LNG carriers from Dynagas, MOL and Teekay.
Next up
Novatek, which has been struggling to bring a fourth small liquefaction train at Yamal online, has since moved on to its shipping for Arctic LNG 2.
To date, the company has signed charter contracts on 21 Arc7 LNG newbuildings for this project.
Fifteen of these are being built at Russia’s Zvezda Shipbuilding Complex with assistance from Samsung Heavy Industries in South Korea.
In addition, Novatek has signed charters for a further six 172,410-cbm, Arc7 LNG newbuildings — three each with Sovcomflot and MOL — that will be built at Daewoo Shipbuilding & Marine Engineering in South Korea. Options are understood to be pending for six more vessels at the yard. But these ships could also be built in China.
Growing fleet at 27
Adding the full six ships the company is currently tendering for will give Novatek a fleet of 27 LNG carriers for Arctic LNG 2.
Combined with the Yamal fleet, the Russian LNG giant will have a total of 53 LNG carriers at its disposal, of which 36 will be ice-breaking Arc7 LNG carriers.
The 19.8-mtpa Arctic LNG 2 is being developed on the Gydan Peninsula 70 km east across Ob Bay from Yamal LNG’s terminal at Sabetta using gravity-based liquefaction units.
The project’s first 6.6-mtpa train is scheduled for start-up in 2023, with the second and third trains to follow in 2024 and 2026, respectively.
In the last few days, reports have detailed that Novatek has tied up loans for 51.6% of the costs for Arctic LNG 2. Half of this will come from Russian finance with the remainder from a pool of foreign banks
The combination of Yamal with this upcoming project will allow Novatek to produce over 36 mtpa from its Arctic projects.
But the company has other developments in the pipeline with Russia planning an expansion of its Arctic production to 140 mtpa by 2035.
