Mitsui & Co is trawling the market for a vessel to take on time charter to ship its Arctic LNG 2 offtake out of a floating storage unit (FSU) that will be moored at the eastern end of the Northern Sea Route (NSR).
Industry sources said the Japanese trading house needs at least one LNG carrier to lift about 1 million tonnes per annum from the FSU that will be positioned off Kamchatka from 2023.
They said it may not need a high ice-class, so potentially could be sourced from the few existing 1C ships in the market if any are available.
But LNG tonnage is being booked up on time charters of one to two years in a run on vessels by traders and charterers that do not want to be left without cover during the busy winter demand period.
As a result of lower deliveries of open tonnage and an expected demand pull for long-haul US-produced LNG, brokers and owners are forecasting that shipping will remain tight into 2023.
Novatek has a 60% stake in the 19.8-mtpa Arctic LNG 2 project on the Gydan Peninsula in north-western Siberia, with French energy major TotalEnergies, China National Petroleum Corp, China National Offshore Oil Corp and Japan Arctic LNG — a consortium of Mitsui and Jogmec — each holding 10% stakes.
Supersize storage
Three-train Arctic LNG 2 is scheduled for start-up in 2023.
Russia is opting to station two giant 360,000-cbm LNG FSUs — one at Ura Bay near Murmansk at the western end of the NSR and a second off Bechevinskaya Bay in the Kamchatka Territory at the eastern end — under its LNG transshipment projects.
Cargoes would be shipped to the FSUs on ice-breaking Arc7 LNG carriers, helping to maximise the use of these specialist vessels. Conventional or lesser ice-class vessels would then take on transshipped volumes from the FSUs.
The FSUs were ordered by Russia's state transport leasing company GTLK at Daewoo Shipbuilding & Marine Engineering.
In September, Japanese shipowner Mitsui OSK Lines said it had signed a letter of intent to take a 49% share in the giant units.
While Mitsui & Co might be looking for a single LNG carrier, Novatek is likely to need many more.
In October, chairman Leonid Mikhelson said Novatek would produce about 70 mtpa of LNG by 2030 and 91 mtpa by 2035.
Observers said this would probably equate to a need for between 20 and 30 additional Arc7 LNG carriers and a fleet of supporting conventional LNG vessels.
