GTT ceases Russian activities

French LNG containment giant GTT is ceasing all of its activities in Russia following new EU sanctions against Russia.

GTT previously said that that the execution of contracts related mostly to Novatek’s projects in the Arctic was at risk due to the Russia-Ukraine war.

The company is involved in Russia in the tank design of 15 ice-breaking LNG carriers under construction by Russian shipbuilder Zvezda, as well as in the design of three GBSs for Saren as part of the Novatek-operated Arctic LNG 2 project.

As of October 1, 2022, revenues of 74 million euros ($78.8 million) remained to be recognized for the ice-breaking LNG carriers by 2025 and 12 million euros ($12.7 million) for the GBSs by 2027, a total exposure representing less than 6 percent of the order book, GTT said in a statement late on Monday.

“Following an in-depth analysis of European sanction packages Number 8 and 9 notably prohibiting engineering services with Russian companies, the group announces that it is ceasing its activities in Russia,” GTT said.

According to GTT, as of January 8, the contract with Zvezda would be suspended and GTT’s interventions would be limited, on the two most advanced LNG carriers, to ensure the safety of the projects and the integrity of the technology, in compliance with the international sanctions in force.

With regards to the GBS projects, the terms of GTT’s departure are currently being finalized.

Financial impact mainly from 2023

GTT said that these elements would have a financial impact mainly from 2023 while its order book would no longer include projects in Russia in the future.

In addition, from 2023 onwards, the group’s annual targets will exclude the revenues and Ebitda that would be generated by the last services in progress in Russia.

GTT noted that other orders under construction in Asian shipyards, relating to six ice-breaking LNG carriers and two FSUs , are intended specifically for Russian Arctic projects.

“To date, these projects are proceeding normally,” it said.

As of October 1, 2022, these orders represented a total revenue of 31 million euros for GTT, to be recognized by 2024.

Finally, eight conventional LNG carriers ordered by international shipowners, under construction in Asian shipyards, are also intended for Russian Arctic projects, but can operate in all types of conditions, GTT said.

“The group remains sensitive to the evolution of the situation and is taking all necessary measures to protect its employees and stakeholders, in compliance with international sanctions,” GTT said.

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