Daewoo Shipbuilding & Marine Engineering has cancelled a specialised ice-breaking LNG carrier newbuilding worth more than $280m contracted by Russian shipowner Sovcomflot (SCF Group).
The South Korean shipbuilder said the vessel, one of three ordered in October 2020, was canned after a payment deadline was missed.
The other two LNG carrier newbuilding orders remain in place.
DSME did not name the shipowner concerned, but South Korean newbuilding sources clarified that these vessels are for Sovcomflot’s account.
The ships are due for handover dates from June onwards. It is unclear as yet which one has been cancelled.
Sources suggested it is likely to be the later-delivering vessel. They indicated that it may have proved impossible to complete the ship due to sanctions affecting the delivery of components and materials.
The cancellation comes as shipowners queue up at yards for scarce LNG carrier berths.
Sovcomflot signed up to three 172,410-cbm Arc7 LNG carrier newbuildings worth $283.3m each at DSME in October 2020.
Japan’s Mitsui OSK Lines also signed contracts for a trio of Arc7 LNG carriers at the same yard.
All six ships are chartered on 30-year time charter contracts by the operator of the Novatek-led Arctic LNG 2 project, which is under construction in Russia.
All the newbuildings are scheduled for delivery in 2023, which was to have dovetailed with the planned start-up of the first liquefaction train of the project.
These specialised, second-generation ice-breaking LNG carriers were to have been fitted with a three Azipod unit propulsion system designed to deliver 51 MW of power, comparable to a nuclear ice-breaker.
The cancellation puts a dent in Novatek’s planned Arc7 fleet for its Arctic LNG 2 project, which it has hinted may now be delayed.
But newbuilding players are speculating about Sovcomflot’s remaining two vessels at the yard and whether payments will be met on these, and if tighter sanctions against Russia might at some stage prevent MOL from delivering its Arc7 trio to Novatek.
DSME is also building two super-size LNG floating storage units for the Russian Arctic.
MOL is building four Arc4 LNG carriers at DSME for charter to Novatek interests, while NYK Line, working in partnership with Sovcomflot, is constructing a similar quartet at Samsung Heavy Industries.
The 174,000-cbm vessels are due for delivery in 2024.
Industry eyes are also trained on three LNG carrier newbuildings for Sovcomflot at Hyundai Heavy Industries, which are backed by charters to TotalEnergies.
Those following these HHI vessels said the intention is to deliver them.