NOVATEK stands for the wheel

The company creates its own Arctic fleet.
NOVATEK, which started shipments of liquefied gas six months ago from Yamal, decided to create its own shipping company for cargo transportation in the Arctic zone. Sources of Kommersant explain that it is a question of LNG transportation and supply flights and NOVATEK, becoming a shipowner, wants to reduce transportation costs. Experts agree that in conditions when it is time to order a fleet for the new project "Arctic LNG", the company needs a unified transportation management to optimize costs.

The Board of Directors of NOVATEK approved the creation of the company Marine Pollution Transport LLC to optimize transportation costs, build up the competencies of Arctic navigation and centralized fleet management. The company refused additional explanations. According to the interlocutor of Kommersant, who is familiar with the situation, NOVATEK wants to reduce its transportation costs in the Arctic zone.

Now the shipping companies put in the freight cost big risks in the Arctic, in addition, the price of charter insurance is growing.

According to a source from Kommersant, Novatek believes that it will be able to save money at the expense, among other things, because a captive company does not necessarily need to make a profit.
It is assumed that she will carry NOVATEK's cargo, primarily liquefied gas. "Only an important decision has been made, the specifics may appear in a few months," the interlocutor of Kommersant says. According to him, this idea appeared in NOVATEK after the practical experience of gas supplies from the Yamal LNG project was received (the shipment began in December 2017).

In addition to Yamal LNG with a capacity of 16.5 million tons of LNG and 1.5 million tons of condensate per year, NOVATEK wants to launch a new Arctic LNG project by 2023 with a capacity of about 20 million tons of LNG per year. He will need ships to transport cargo for the project, as well as finished products. Another interlocutor of "Kommersant" in the industry recalls that the cost of one LNG tanker class Arc7 for "Yamal LNG" was $ 330 million, and such built 15 pieces. Only one of them belongs to the Russian state "Sovkomflot", and the rest to foreign companies, since the company "does not have enough resources for construction." Sovcomflot declined to comment. NOVATEK, being both the owner of the ships and the shipper, is likely to be able to save, the interlocutor of Kommersant believes.

Another source of Kommersant believes that the project can be implemented by analogy with the experience of MMC Norilsk Nickel, which has a fleet of six Arc7 ships (owned by the subsidiary structure of the Murmansk Transport Branch). If NOVATEK owns these vessels, they will go under the Russian flag (which is now mandatory for new vessels on the Northern Sea Route), in contrast to the fleet for Yamal LNG. But the interlocutor of Kommersant doubts that NOVATEK will cut costs, "first and foremost, we are talking about reliability and control."

Director of the consulting center "Gekon" Mikhail Grigoriev considers it logical that NOVATEK has thought about a single managing structure for the transportation of its LNG. Now the fleet of Yamal LNG has in fact four owners: Sovcomflot, Canadian Teekay, Greek Dynagas and Japanese Mitsui. Meanwhile, NOVATEK needs to minimize the number of ice gas carriers that are much more expensive than conventional tankers, for which the company is going to build LNG transshipment in Kamchatka and is thinking about the same hub in the Murmansk region. This is necessary to shorten the duration of flights of ice gas carriers and bring the LNG transshipment points to conventional ships to the port of Sabetta. In addition, Mikhail Grigoriev notes that for the Arctic LNG NOVATEK can order cheaper tankers of the ice class Arc4. Vessels of these ice classes, he explains, have various restrictions on operation in the water area of ​​the Northern Sea Route, which implies the construction of a single optimized transportation system.