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Sakhalin Energy News

19 May 2023

Sakhalin Energy Sues Svitzer over Tugboats

©Svitzer operating in Sakhalin, Russia. Image Courtesy Svitzer (File Image)

Russia's Sakhalin Energy operating company has filed a lawsuit in a Russian court over tugboats owned by Denmark's Svitzer, a unit of shipping and oil group A.P. Moller-Maersk, court documents showed on Thursday. The Russian court on the Pacific island of Sakhalin last month ordered the seizure of four tugboats belonging to Svitzer at the request of Sakhalin Energy, which claimed that the Danish company had unilaterally annulled the freight contract with it. Maersk has said it decided to exit Russia completely in March 2022 and has had an ongoing divestment process over its towage activities…

10 May 2023

Russian Court Seizes Four Danish-owned Tugboats in Sakhalin

Svitzer operating in Sakhalin, Russia. Image Courtesy Svitzer (File Image)

A Russian court on the Pacific island of Sakhalin has ordered the provisional seizure of four tugboats belonging to Denmark's Svitzer, the world's biggest tugboat operator, at the request of a Russian energy company. Moscow has been seizing the assets of some Western companies which have left the country or are scaling back their business there in response to the conflict in Ukraine and Western sanctions. A court ruling dated April 24 said it had ordered the tugboats seized in response to a request by Sakhalin Energy…

05 Oct 2022

Mitsui OSK Signs Charter With New Russian Operator of Sakhalin-2 LNG project

Japan's Mitsui OSK Lines (MOL) said on Wednesday it had signed a long-term charter contract with the new Russian operator of the Sakhalin-2 liquefied natural gas (LNG) project for LNG carrier Grand Mereya to continue its shipping service.Russian President Vladimir Putin signed a decree in June taking charge of the LNG project, creating a new legal entity to deal with buyers and shareholders. MOL's move comes after Japanese utilities, such as JERA and Tokyo Gas, signed deals with the new Russian operator to maintain long-term deliveries of LNG and Japanese trading houses Mitsui & Co and Mitsubishi Corp were approved by Russia to take a stake in the new operator.

01 Jul 2022

Russia's Control of Sakhalin Project Could Pose Upside Risk to LNG Prices

File Photo: Sakhalin Energy

Russia announced on Friday a decree that seizes full control of the Sakhalin-2 gas and oil project in the country's far east, a move that could force out Shell and Japanese investors and adds another bullish factor to prices in a tight global LNG market.The order, signed on Thursday, creates a new firm to take over all rights and obligations of Sakhalin Energy Investment Co, in which Shell SHEL.L and two Japanese trading companies Mitsui and Mitsubishi hold just under 50%. Japanese…

18 Aug 2021

Sakhalin Energy: Maintenance Continues at LNG Train 2

Credit: Sakhalin Energy

Russian liquefied natural gas producer (LNG) Sakhalin Energy said on Wednesday post-shutdown commissioning was continuing at the second LNG train at its Prigorodnoye production complex.Comprehensive maintenance work, which began on July 9, had been initially due to last around 37 days, meaning the stoppages had been expected to finish by around this week. Sakhalin Energy said the first LNG train had restarted and the Amur River LNG carrier had departed with a first LNG cargo.It was not immediately clear when the second LNG train would be back online fully…

04 Jun 2021

Two Sovcomflot Tankers Chartered to the Sakhalin-2 Project

The agreements were signed at the 24th St. Petersburg International Economic Forum by Igor Tonkovidov, President and CEO of Sovcomflot, and Roman Dashkov, CEO of Sakhalin Energy, in the presence of Alexander Novak, Deputy Prime Minister of Russia, Pavel Sorokin, Russia’s Deputy Minister of Energy, and Alexey Miller, Chairman of the Management Committee of Gazprom. (Photo: PAO Sovcomflot)

On 4 June 2021, Sovcomflot (SCF Group) and Sakhalin Energy, the operator of the Sakhalin-2 project, signed long-term time-charter contracts for two existing liquefied natural gas (LNG)-fueled Aframax tankers. The vessels Korolev Prospect and Vernadsky Prospect, part of SCF’s ‘Green Funnel’ series, will be delivered to the charterer in 2024 and employed to shuttle crude oil for the Sakhalin-2 project for 10 years, with an extension option for up to three years. Prior to delivery…

23 Mar 2020

Svitzer Gets 10-Year Contract Extension with Sakhalin Energy Investment

Svitzer operating in Sakhalin, Russia. Image Courtesy Svitzer.

Svitzer, the towage operator that is part of Maersk, announced a 10-year extension of its marine service contract with Sakhalin Energy Investment Company Ltd., a consortium set up to develop and manage the Sakhalin-II project, aimed at producing and exporting oil and liquefied gas.Svitzer has been providing towage services to the Sakhalin-II project since 2007, and the extension comes into effect in November 2022 to support the mooring of more than 1,800 gas carriers with a vessel fleet of four Robert Allen ice-breaking tugs and two mooring boats.

13 Sep 2019

Sovcomflot, NYK Pact on Financing 2 LNG Carriers

Russian maritime shipping company specializing in petroleum and LNG shipping Sovcomflot (SCF Group) and NYK Line have announced that they have signed a new $176 million non-recourse credit facility for eight years with three leading international banks.The banks are: Sumitomo Mitsui Banking Corp. of Japan (through its German subsidiary, SMBC Bank EU AG); Société Générale of France; and Shinsei Bank of Japan. The agreement was reportedly signed through joint venture companies belonging to SCF Group and NYK Line.The facility will be used towards refinancing two ice-class LNG carriers servicing the Sakhalin-2 project, Grand Aniva and her sister ship Grand Elena, which are jointly owned and operated by SCF Group and NYK Line.

09 Sep 2019

Gazprom, Kogas for Tighter LNG Cooperation

Russian oil and gas company Gazprom Neft has announced that a working meeting has been held between Alexey Miller, Chairman of the Gazprom Management Committee, and Hee-Bong Chae, President and Chief Executive of KOGAS.The meeting participants reviewed the state and prospects of cooperation between the companies, highlighting the stability of LNG supplies under the contract between Sakhalin Energy Investment Company Ltd. and KOGAS.The parties expressed interest in further expanding their cooperation in the area of LNG and continuing their sci-tech collaboration.KOGAS (Republic of Korea) is focused on the construction and operation of LNG receiving terminals and gas distribution networks…

27 Mar 2019

Arctic (& Wind) Operations: Hands Across the Water

Renderings of the proposed Aeolus wind support fleet

As the North American offshore wind model evolves, it is clear that fit-for-purpose, Jones Act compliant and Arctic ready tonnage will need to be part of the equation. If so, we’ve got that box checked, with a little help from Europe.As of September 2018, the Walney Extension off the United Kingdom is the largest offshore wind farm in the world at 659 megawatts. There are at least 70 major wind farms, each with hundreds of wind turbines, each generating as much as 10 megawatts in offshore England, the North Sea, Russia and China.

18 Mar 2019

Sovcomflot Updates Fleet Strength

Russian maritime shipping company specializing in petroleum and LNG shipping Sovcomflot (SCF Group) said that Yevgeny Primakov (Icebreaker Ice-15) joined the fleet, the final vessel in a series of four new generation IBSV’s, engaged under a long-term time-charter agreement with Sakhalin Energy.The shipping company added that this makes a total fleet of 10 supply and standby vessels servicing Nogliki Base Camp (SEIC and ENL) at Sakhalin island (Sea of Okhotsk).The world’s first Aframax tanker to use LNG as her primary fuel Gagarin Prospect (114,000 DWT) entered service (July) on long-term time charter to Shell. In last October, Gagarin Prospect completed her first commercial voyage using LNG fuel…

18 Mar 2019

SCF Registers Growth in Offshore Revenues

The energy shipping company PAO Sovcomflot (SCF Group) has managed to increase its revenue base and achieved a profit of USD 11.9 million against a USD 106.2 million loss in 2017.The annual results reflected a strong contribution from the industrial shipping business (comprising offshore services and LNG transportation). These activities now account for 57.2 per cent of the Group’s TCE revenues (up from a 50.9 per cent share in 2017).Taking into account the challenging conditions in the conventional tanker markets, and in accordance with IFRS accounting standards, SCF Group undertook an impairment review of vessel values for the year ended 31 December 2018.

20 Feb 2019

Sakhalin: Offshore Heavy Lift Refit

Photo: Liebherr

Large-scale conversion project on offshore platform Molikpaq operated by Sakhalin Energy.While the refit of heavy lift capacity onboard an offshore rig might sound mundane, Liebherr’s project to replace and modernize cranes on the offshore platform Molikpaq operated by Sakhalin Energy, a unit subjected to some of the world’s harshest conditions, is anything but mundane.The modernization project on Sakhalin Energy’s offshore platform off the Russian island of Sakhalin includes two ram luffing offshore cranes, type RL 1500 that are going to be completely renewed.

23 Jan 2019

Gazprom, Mitsui Discuss LNG Cooperation

Japanese trading house and liquefied natural gas market participant Mitsui has held talks with Russia’s giant Gazprom on cooperation in liquefied natural gas (LNG) projects.A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Masami Iijima, Chairman of the Board of Directors of Mitsui & Co., Ltd., took place in Moscow.They discussed about the progress made in two Russian plans to expand LNG output, on the existing Sakhalin Island plant in the Far East and at a planned facility west of Saint Petersburg."The parties discussed current issues related to bilateral collaboration, including the Sakhalin II project…

15 Jan 2019

Weak Freight Markets Hobble Sovcomflot IPO

(Photo: Sovcomflot)

Russian state-owned shipping company Sovcomflot said on Tuesday that uncertain conditions in the freight market are delaying its long-planned initial public offering (IPO).The Russian government has weighed a listing of Sovcomflot for years as part of broader privatization plans, but obstacles ranging from weak markets to international sanctions placed on Russians over Moscow's role in Ukraine crisis have prevented an IPO.The Russian economy ministry has said it had hoped to raise…

28 Nov 2018

LNG Carrier Hits Berth in Russia

The Grand Elena tanker, carrying 145,000 cubic meters of liquefied natural gas (LNG), has hit a loading berth at Russia's Sakhalin Energy project on Tuesday and its departure has been delayed, a spokeswoman for the project told Reuters.She said it was not yet clear when the vessel would depart the port. Japan is the main consumer of the Sakhalin Energy LNG, which produces more than 10 million tonnes of the frozen gas per year.There has been no leaks of gas from the tanker and no one was injured, the spokeswoman added.(Reporting by Vladimir Soldatkin; Editing by Gopakumar Warrier)

12 Sep 2018

Gazprom, Mitsui Sign MOU on Baltic LNG Project

Russian energy giant Gazprom and Japanese Mitsui & Co. Ltd. have signed a memorandum of understanding at the Eastern Economic Forum on the liquefied natural gas plant project Baltic LNG.The memorandum was signed after the meeting between Gazprom CEO Alexey Miller and Mitsui Chairman of the Board of Directors Masami Iijima.The parties discussed the ongoing cooperation on the Sakhalin II project and the prospects for collaboration between the companies. In particular, the meeting addressed the construction of the third train of the Sakhalin II LNG plant.Alexey Miller and Masami Iijima also considered the avenues for cooperation in the area of small- and mid-scale LNG in the Far East.Japan’s Mitsui & Co., Ltd.

01 Jun 2018

LNG Prices Climb on Limited Supply

© donvictori0 / Adobe Stock

Asian spot liquefied natural gas (LNG) prices rose this week to their highest since February as buying interest from China remained firm and as supply is expected to be limited during maintenance in August.Spot prices for July delivery in Asia were at $9.60 per million British thermal units (Btu) this week, gaining 40 cents from the previous week and are at the highest for this time of the year since 2014.Higher oil prices had been deterring some buyers from snapping up cargoes in the spot market in recent weeks but some of them may now need to cover their requirements promptly…

20 May 2018

PAO Sovcomflot: Tanker Market is Challenging

PAO Sovcomflot (SCF Group) continued to increase the share of its fleet serving long-term energy projects over the first quarter ending 31 March 2018. This helped offset the negative impact of the protracted decline in freight rates that continues within the conventional tanker freight markets. Nikolay Kolesnikov, Executive Vice President and CFO of PAO Sovcomflot, commented on the quarter's results: "In the first quarter of 2018, conditions within the global conventional tanker market remained extremely challenging. The significant imbalance between tonnage supply and demand in the crude oil and petroleum products shipping segments heaped more downward pressure on freight rates, which had reached records lows in some sectors having fallen by almost 50 per cent year-on-year.

19 Mar 2018

Sovcomflot Better, Despite Challenging Year

PAO Sovcomflot (SCF Group), one of the world leaders in energy shipping and marine services to offshore oil and gas upstream projects, said that its gross revenue for the full year to 31 December 2017 grew by 3.4% to $1.43 billion. According to the statement, 2017 proved to be one of the worst years for the conventional tanker market in the last quarter of a century, with similar conditions experienced to those seen in 2011 and 1992. Conventional tanker freight rates fell by almost 50 per cent year-on-year, reflecting an oversupply of speculative orders following the 2015 market spike, as well as the effect of sustained production cuts by OPEC and other oil producing nations and a backwardation in the oil trade.

05 Feb 2018

Sovcomflot’s New Icebreaker Named

(Photo: Sovcomflot)

A ceremony raising the flag of the Russian Federation and naming a new multifunctional icebreaking platform supply vessel, Yevgeny Primakov, took place on February 3, 2018 in Saint Petersburg. The vessel was built by Arctech Helsinki Shipyard, a subsidiary of the United Shipbuilding Corporation; technical supervision was carried out by the Russian Maritime Register of Shipping (RS), which assigned the vessel a high ice class – Icebreaker6. Yevgeny Primakov’s design and construction…

21 Nov 2017

Gazprom, Shell Discuss LNG Projects

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Maarten Wetselaar, Member of the Executive Committee of Royal Dutch Shell, took place in St. Petersburg. The meeting addressed relevant aspects of strategic cooperation. Particular attention was paid to joint efforts in the liquefied natural gas (LNG) sector. The parties discussed the construction project for the third train of the LNG plant on Sakhalin Island and the progress of the Joint Study Framework Agreement for the Baltic LNG project. The meeting also focused on the Nord Stream 2 project. Gazprom and Shell are jointly engaged in the Sakhalin II project, which includes Russia's only active LNG plant. The Sakhalin II operator is Sakhalin Energy Investment Company Ltd.

17 Nov 2017

Sovcomflot Reports Loss for 9M 2017

(Photo: PAO Sovcomflot)

PAO Sovcomflot (SCF Group) reported a $6.8 million loss for the first nine months of 2017, citing the adverse impacts of low spot market freight rates in the conventional tanker sectors. “This year has proven to be a very challenging period for the tanker industry and the situation now faced by many conventional tanker ship owners is especially severe,” said Sergey Frank, President and CEO of PAO Sovcomflot. “An oversupply of tonnage and reduced demand, resulting from oil capacity cut-backs led by OPEC…