Russia’s Novatek finalizes Arctic LNG 2 fleet deals

Russian independent LNG producer Novatek has inked long-term charter deals securing a fleet of Arc7 ice-class tankers that will serve its second liquefaction project in the Arctic.

Arctic LNG 2 entered the deal for 14 vessels with SMART LNG, a venture consisting of Novatek and Russia’s largest shipping firm Sovcomflot.

The signing of the charter deals allowed SMART LNG to conclude the corresponding contracts with the VEB.RF Group and Zvezda yard for the construction and lease financing of these vessels.

This brings the total number of Arctic 2 LNG fleet to 15 ice-class vessels as the contracts for the pilot vessel were signed in October last year.

The construction of these LNG carriers will ensure year-round transport of LNG along the Northern Sea Route to the Asian Pacific region.

Furthermore, it will also provide an important stimulus to develop the Russian shipbuilding industry, Novatek said in a statement.

Arctic LNG 2 is located on the Gydan peninsula and includes the construction of three LNG trains with a capacity of 6.6 mtpa, each.

The project utilizes a new concept using gravity-based structure platforms to reduce overall capital cost and minimize environmental footprint in the Russian Arctic.

The Russian company expects to launch the first LNG train in 2023, with trains 2 and 3 to follow in 2024 and 2026, respectively.

Besides operator Novatek, the project partners include Total, CNPC, CNOOC, and the consortium of Mitsui and JOGMEC.

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