Russia: Sovcomflot and Vnesheconombank Sign Cooperation Deal for Yamal LNG Project

On 16 June 2011, as a part of St. Petersburg Economic Forum, Russia’s largest tanker company Sovcomflot and the State corporation “The Bank for Development and Foreign Economic Affairs (Vnesheconombank)” signed a bilateral agreement on cooperation. The document was signed by SCF’s President and CEO Sergey Frank and Vnesheconombank’s Chairman Vladimir Dmitriev.

The agreement covers: the structure of ship building finance; the acquisition and subsequent operation of conventional LNG tankers, shuttle LNG tankers, tankers designed to carry gas condensate and supply vessels for the liquefied natural gas (LNG) production project in the Yamal peninsula.

According to the document, the parties intend to develop phased financing schemes for the acquisition of ships and their operation.

The implementation of this project is stipulated by the Comprehensive Plan for the development of LNG production in the Yamal peninsula, approved by the Government of the Russian Federation.

“According to the International Energy Agency (IEA), by 2035 natural gas will fulfill more than one fourth of global energy demand, and its world consumption will grow by more than 50 per cent compared with the levels of 2010. The Russian Government has set the task of launching LNG production in the Yamal peninsula. Providing LNG transportation by sea, in the harsh climatic conditions of the Arctic latitudes, will require not only the mobilisation of an unprecedented volume of financial resources, but also the application of innovative approaches to the project structure and terms of financing. We expect that the experience gained by our companies, while jointly implementing the construction project and further operation of the two shuttle tankers for the Prirazlomnoye project, will help us to successfully fulfill the task”, said SCF President and CEO Sergey Frank.