Novatek’s Arctic LNG 2 signs charter agreements for LNG vessels

7 September 2020 (Last Updated September 7th, 2020 16:09)

Russian company Novatek’s joint venture (JV) Arctic LNG 2 has signed long-term charter agreements with SMART LNG on 14 Arc7 ice-class liquefied natural gas (LNG) tankers.

Novatek’s Arctic LNG 2 signs charter agreements for LNG vessels
The Arctic LNG 2 project will involve the construction of three LNG liquefaction trains. Credit: NOVATEK.

Russian company Novatek’s joint venture (JV) Arctic LNG 2 has signed long-term charter agreements with SMART LNG on 14 Arc7 ice-class liquefied natural gas (LNG) tankers.

SMART LNG is a JV between Novatek and Sovcomflot.

The LNG tankers will be constructed at the Zvezda Shipbuilding Complex.

With the signing of the charter agreements, SMART LNG has concluded the corresponding contracts with the VEB.RF Group and Zvezda Shipbuilding Complex for the construction and lease financing of the tankers.

The contracts for chartering, financing and construction of a pilot ice-class LNG tanker to be constructed at the Zvezda shipyard were signed in October last year.

Earlier, the construction of 15 Arc7 ice-class LNG tankers at the complex was approved by the participants of Arctic LNG 2 in accordance with the projects’ Sea Transportation Strategy.

The construction of the vessels ensures the core formation of the Arctic fleet for the Project, which will enable the year-round transport of LNG along the Northern Sea Route to the Asian Pacific region.

It is also expected to provide an important stimulus to develop the shipbuilding industry of Russia.

As part of the Arctic LNG 2 project, three LNG liquefaction trains of 6.6 million tonnes (mt) per annum each will be constructed. They will have total LNG capacity of 19.8mt.

The project will also have a cumulative gas condensate production capacity of 1.6mt a year.

The Arctic LNG 2 project employs a new construction concept, using gravity-based structure (GBS) platforms for reducing overall capital cost and its environmental footprint in Russia’s Arctic zone.

Participants in the project include Novatek (60%), Total (10%), CNPC (10%), CNOOC (10%) and the consortium of Mitsui and JOGMEC (10%).

In September last year, Zvezda Shipbuilding Complex selected Samsung Heavy Industries (SHI) to construct LNG carriers for the project.