NOVATEK resumed LNG shipments from Murmansk

NOVATEK, after the introduction of large-scale US sanctions, returned to the practice of offshore transshipment of LNG from ice-class gas carriers to conventional tankers in the Murmansk region using a board-to-board scheme. Last weekend, the Arc7 tanker Nikolai Urvantsev and LNG Dubhe began loading for transshipment near Kildin Island. NOVATEK has not yet begun to use the Saam FSU floating storage facility for transshipment, which came under US sanctions in September.

NOVATEK resumed offshore transshipment on a board-to-board basis near Kildin Island in the Murmansk Region. On December 9, the Arc7 ice-class LNG tanker Nikolay Urvantsev and the LNG tanker Dubhe (owned by the Chinese COSCO and Japanese MOL) completed loading near Murmansk, according to data from the Kpler analytical system. LNG Dubhe continues to stand near Kildin Island for now, then it will probably go to China via Suez. The last time board-to-board transshipment was carried out was in June. NOVATEK did not respond to Kommersant’s request.

NOVATEK has not yet used the floating storage vessel Saam FSU (floating storage unit), which came under direct US sanctions in September, for transshipment in Murmansk. Washington included in the SDN list Arctic Transshipment LLC, which operated two LNG storage vessels in Murmansk and Kamchatka, as well as the FSUs themselves – Saam FSU and Koryak FSU. This significantly complicated the logistics scheme for shipments from the Yamal LNG projects and the future Arctic LNG-2 plant for NOVATEK.

With the help of FSU, NOVATEK expects to save on gas transportation from its Arctic projects by reducing the number of ice-class LNG tankers, which are more expensive than conventional ones. Also, based on these FSUs, NOVATEK planned to organize spot sales of gas on FOB terms. This would relieve NOVATEK of the need to independently ensure the delivery of LNG to the buyer’s market. Now selling gas on FOB will become extremely difficult, as buyers will risk secondary sanctions when interacting with transshipment complexes. The use of FSU would also speed up transshipment, since in a board-to-ship system the arrival of tankers must be synchronized, and the process itself takes about 36 hours.

Now, under the conditions of sanctions, NOVATEK will have to build new supply logistics, since in the first quarter of 2024, taking into account the general shortage of new tankers, the first line of the new Arctic LNG-2 project with a capacity of 6.6 million tons per year should start operating. In addition to side-to-side transshipment, NOVATEK may begin supplying LNG along the Northern Sea Route, accompanied by icebreakers, from January 2024, as the head of Glavsevmorput Sergei Zybko reported last week. According to him, shipments via a shorter route will also be carried out in March, April and May. At the same time, shipments along the Northern Sea Route can only increase the shortage of Arc7 class ice tankers, since the distance for them to Kamchatka will be greater than to Murmansk, where they usually transfer gas to conventional tankers during winter navigation.

Victor Katona from Kpler notes that this is the third side-to-side transshipment of the LNG Dubhe tanker this year, all three cases with Yamal LNG, so, most likely, we are talking about optimizing logistics chains: so that Arctic-class tankers do not have to waste time for long-term deliveries, shuttle technology is used, since LNG Dubhe was built by Chinese shipyards and does not have an Arctic class.

The head of the Gekon consulting center, Mikhail Grigoriev, recalls that NOVATEK uses the temporary transshipment complex Kildin-Vostochny in the winter, starting from the winter of 2020–2021, which allows increasing the carrying capacity of Arc7 gas carriers of the Christophe de Margerie type. The commissioning of the sea transshipment complex in Ura Guba is planned for the end of 2023, but the situation with the port fleet that Damen built is still unclear, he notes, the same situation with the complex in Bechevinskaya Bay. “The inclusion of Arctic LNG-2 LLC and both transshipment complexes in the SDN list creates risks for foreign buyers and carriers, which take time to understand,” states the expert.

Tatiana Dyatel