Sovcomflot to Provide Year-round LNG Supply for Novatek 

A joint venture by Russian gas producer Novatek and shipping company Sovcomflot will be set up to ensure year-round supplies of liquefied natural gas (LNG) from Arctic LNG 2 and other future LNG projects of Novatek, the two companies said, according to TASS.

“The company will enable us to operate the fleet more efficiently. Transport expenditures account for more than one-fourth of LNG production cost,” Novatek’s CEO Leonid Mikhelson said at the signing ceremony that took place at the Eastern Economic Forum on Wednesday.

The joint venture will own vessels, operate the fleet and attract financing. It will also order 17 Arc7 tankers from the Zvezda Shipyard and will monitor their construction. Their commissioning is planned for 2023-2026. The ships will sail under the Russian flag.

The funds for construction will be raised with the support of VEB.RF. It is planned to register the joint venture in Vladivostok.

“This enterprise is open to attract professional investors, participants on an ordinary commercial basis. We have no task to create any closed systems,” said the head of Sovcomflot Sergey Frank, answering a question about the possibility of attracting new partners in the joint venture.

According to him, another joint venture of Novatek, Sovcomflot, Chinese Cosco Shipping and the Silk Road Fund – Marine Arctic Transport LLC – will be more global. Unlike the new JV, it is focused on the delivery of LNG to the final consumer and its activities will be focused on providing LNG supplies to transshipment points in Kamchatka and Murmansk.