Russian joint venture Smart LNG has signed shipbuilding contracts for 10 additional Arc7 LNG carrier newbuildings at Zvezda Shipbuilding Complex, but the contracts have yet to be finalised.
Shipowner Sovcomflot and liquefaction project developer Novatek’s Smart LNG is understood to have inked the contracts in the last few days.
Final hurdle
But sources said the partners have still to put the finance for the new vessels in place before the contracts can become fully effective. They had previously been working with Russia’s VEB.RF on funding the newbuildings.
The ships were originally due to have been finalised in the first quarter of this year but were delayed while Novatek simultaneously worked on a series of other Arc7 LNG newbuildings outside Russia.
The 10 ships at Zvezda will be in addition to five that the partners have already inked at the shipyard.
Sovcomflot took on the first Zvezda LNG carrier newbuilding, signing up for the vessel in October.
Smart LNG, which was set up in September 2019 to own and operate the LNG carriers for Arctic LNG 2, along with vessels for existing and other Novatek projects, followed with four sister vessels. Time-charter contracts and financing on the first quintet were all put in place in the first quarter of this year.
Novatek has previously indicated that it plans to sign up to at least 15 Arc7s at Zvezda to serve its under-construction 19.8-million-tonnes-per-annum Arctic LNG 2 project, which is due to start up in 2023.
Samsung Heavy Industries is working with the Russian shipbuilder on the technology for what will be Zvezda’s first LNG carrier newbuildings. The South Korean yard is expected to build the hull blocks for the first tranche of Arc7s, with assembly and completion of the newbuildings to take place in Russia.
Zvezda is building a new dry dock in which to construct the LNG carriers and last month became the first Russian shipyard to secure a licence agreement from France's GTT to build membrane-type LNG cargo tanks.
Additional vessels
Separately, Novatek is working with shipbuilders in South Korea and China on a further 10 Arc7 LNG carrier newbuildings.
South Korea’s Daewoo Shipbuilding & Marine Engineering had been poised to sign an order for these this month, comprising six firm vessels with optional berths. But those following the business said the signing was postponed while Smart LNG worked on the Russian orders.
Chinese shipbuilder Hudong-Zhonghua Shipbuilding (Group) is also in the running for some of these 10 vessels. But the contracts and their timings at the Shanghai yard are dependent on how and when other LNG carrier berths for Qatargas are finalised.
In addition to Arctic LNG 2, 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.
