Russian Arctic Tanker Vessels Order Cancelled By South Korean Shipbuilder

The LNG carrier is the first of a set of three vessels to be ordered by a Russia-based shipping firm Sovcomflot. At a stock exchange filing, the South Korea-based shipbuilder shares that the client was unsuccessful in clearing an instalment payment on a contract it had received in 2020 around October, per reports from iShipNet.

The vessel is worth $270 million and is part of a larger $800 million order. If the Russian buyer fails to meet payment requirements, the Deawoo Shipbuilding will eventually have to cancel the second and also third vessels.

The powerful carriers are to be built for the Arctic LNG 2, the major liquefied natural gas project on the far northern Gydan Peninsula. They are based on a unique ship design that is developed by Aker Arctic, a Finnish firm, to enable year-round shipping via the iciest parts of the Northern Sea Route.

Novatek LNG STS bunkering
Representation Image – Credits: novatek.ru

Besides the three carriers that had been ordered by Sovcomflot, three similar ships had also been ordered by the Mitsui O.S.K. Lines. The carriers were supposed to become part of a major fleet that caters to the Arctic LNG 2 project.

The scenario follows Russia’s invasion of Ukraine and the sanction regime imposed on the former by the international society. The 5th sanctions package of the EU places a ban on exports to Russia of key industry components. Firms like Linde are stopping their business development activities in the country.

The sanctions threaten to severely impact Novatek’s industrial projects envisioned for development in the Arctic. The Daewoo Shipbuilding is Novatek’s major partner in many Arctic projects. The Koreans are also to pitch in for building Novatek’s floating LNG storage facilities close to Murmansk.

A deal worth $748.2 million had been signed by two companies in 2020 around October. It includes constructing two big floating storage facilities of 380,000 cubic meters. Once ready, they would be towed to an LNG terminal site in Vidyaevo.

Reference: thebarentsobserver.com

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