Daewoo Shipbuilding & Marine Engineering has cancelled the last of three Arc7 LNG carriers originally contracted by Russian shipowner Sovcomflot (SCF Group).
The South Korean yard announced that it had given notice to a Russian client that it had canned the KRW 337.9bn ($255m) contract that was signed on 9 October 2020. It ended the contracts on the other two ships earlier this year.
Key equipment suppliers for LNG carriers are unable to supply kit and materials for the ships under sanctions imposed on Russia following its invasion of Ukraine.
DSME has previously indicated that it will continue to build the vessels for its own account and confirmed to the local press that it will press ahead with this third order too.
Sovcomflot originally ordered the trio for around $283.3m each.
DSME cancelled the first vessel on 18 May and the second on 1 July, each time saying contractual payments had not been met.
Japan’s Mitsui OSK Lines ordered three Arc7 LNG carriers at DSME at the same time as Sovcomflot.
All six ships are on 30-year time charter contracts to the operator of the Novatek-led Arctic LNG 2 project in Russia, the start-up of which has been delayed.
Construction is understood to be continuing on MOL’s Arc7 ships.
All six vessels were originally scheduled for delivery in 2023, to fit with the start-up of the first train from Arctic LNG 2.
DSME, which has logged a record LNG order haul in 2022, is also building two large LNG floating storage units ordered for the Russian Arctic project.
These are due to be delivered next year for planned transshipment hubs on the Northern Sea Route.
Much attention continues to swirl around LNG carriers linked to Russian business that remain under construction.
MOL has a quartet of Arc4 LNG carriers on order at DSME for charter to Novatek interests, while NYK Line, which was working in partnership with Sovcomflot, is constructing four at Samsung Heavy Industries.
TradeWinds reported in August that NYK had taken over, or was in the process of taking over, Sovcomflot’s interests in these four ships on which it partnered the Russian owner.
