South Korea’s DSME cancels LNG carrier order

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

DSME said in a stock exchange filling this order is related to a contract it had won in October 2020, worth about 1.1 trillion won ($872 million), for three LNG carriers with the unidentified European owner.

Under the contract, the shipbuilder had expected to deliver the vessels by July 2023.

Also, DSME said the orders for the two other LNG carriers remain in place and the contract now has a price tag of about 675.8 billion won.

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 Russia’s Sovcomflot but also Japan’s MOL.

According to VesselsValue data, Sovcomflot would take delivery of three LNG carriers under this deal from January until July next year, while the MOL carriers would join the fleet from September to December the same year.

Shipbuilding sources said that the termination of the contract is most likely related to one of the three Sovcomflot vessels as the Russian firm has been hit by sanctions.

Singapore’s EPS recently bought four LNG carriers previously owned by Sovcomflot directly from Dutch ING bank.

Banks are selling vessels to comply with sanctions imposed by the UK and EU against Russia and Russian companies.

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