DSME cancels third LNG carrier order linked to Sovcomflot

South Korean shipbuilding giant Daewoo Shipbuilding and Marine Engineering has terminated an order for another LNG carrier after a European shipowner missed the payment deadline.

This is the third and final LNG carrier linked to an order by Russia’s Sovcomflot. DSME announced the termination of the contract for the first ship in May and for the second in June.

DSME said in a stock exchange filling on Friday that this order is related to a contract it had won in October 2020.

The contract worth about 1.1 trillion won ($872 million) included three LNG carriers with the unidentified European owner and scheduled for delivery by July 2023.

DSME said in the filling it had notified the European owner of the termination of the contract for one LNG carrier worth 337.9 billion won.

The shipbuilder said that due to export control on Russia, supply of major equipment and materials had been delayed or suspended, making it impossible to build the ship.

Back in October 2020, DSME secured orders for six LNG carriers worth about 2.2 trillion won.

Novatek’s Arctic LNG 2 project entered into long-term charter agreements for these Arc7 ice-class LNG tankers with Sovcomflot but also Japan’s MOL.

Brokers and shipbuilding sources previously said that the termination of the first contract in May and the second in June was related to the three Sovcomflot vessels as the Russian firm had been hit by sanctions.

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