Shipbuilders submitted bids this week to build 10 LNG carriers to serve Arctic production projects planned by Russian energy company Novatek.
Newbuilding sources said South Korea’s big three shipyards — Samsung Heavy Industries, DSME and Hyundai Heavy Industries — and China’s only large LNG carrier builder, Hudong-Zhonghua Shipbuilding (Group), were due to offer in on the high-spec, ice-class ships on Tuesday.
They are being ordered in addition to the 15 ships that Novatek and its partner Sovcomflot (SCF Group) have either inked or are in the process of negotiating at Russia’s Zvezda Shipbuilding Complex.
Novatek is understood to be seeking to make a speedy decision on berths for the 10 Arc7 newbuildings, which it wants delivered from 2023.
It is said to have indicated to yards that 10 vessels may be just a starting point, and that it could require additional ships.
Shipbuilding observers said all three South Korean yards had links to projects seeking Arc7 LNG carriers.
DSME built and delivered the 15 Arc7 vessels that are serving the Novatek-led Yamal LNG project, handing over the last ship to its owner and the project late last year.
SHI was selected as the shipbuilder to pair with emerging Russian yard Zvezda on the ships that Novatek requires for its 19.8-million tonnes per annum Arctic LNG 2 project on the Gydan peninsula, which is due for start-up in 2023.
To date, five of these have been ordered — the first by Sovcomflot and four by the Novatek-Sovcomflot joint venture Smart LNG.
SHI is expected to build the hull blocks for the latest order, with assembly and completion of the newbuildings to take place in Russia.
Long-term charters
A further 10 are due to be ordered at Zvezda by Smart LNG this quarter.
HHI also worked on designs for Arc7 LNG carriers when it was competing for the Yamal LNG ships.
Hudong-Zhonghua has been building conventional LNG carriers for MOL, Dynagas and their partners, which are fixed on long-term charters for Yamal business.
With the volumes from Arctic LNG 2 production targeted at China, from sailings via the Northern Sea Route, those following the business predict a Chinese shipbuilder might secure some of the slots for the business.
Aside from the operational 16.4-mtpa Yamal LNG and under-construction 19.8-mtpa Arctic LNG 2, Novatek is developing the 4.8-mtpa project Ob LNG on the Yamal peninsula, which could come online concurrently with or in advance of Arctic LNG 2.
Novatek officials have previously said the gas resource base in the Russian Arctic offers the potential for 140 mtpa of LNG production if the market demanded it.
