Sergey Frank, president and chief executive officer, Sovcomflot
PAO Sovcomflot (SCF) is probably unique in the world of tanker shipping. It is a global tanker company with unarguable expertise of operating in Arctic and sub-Arctic waters, which accounts for some 10% of its operations. Along with an operational expertise in harsh environments, over the past 10 years SCF has shipped over 250M tonnes of oil and 50M m3 of LNG from remote offshore oil and gas fields to global markets.
Sovcomflot is providing the logistics to lift crude oil, products and LNG and to deliver these to customers worldwide using its 145-vessel fleet. The company recently took delivery of five LNG-fuelled ice-class tankers and has several on order from Zvezda, a Russian shipyard. The company is self-contained in that it trains and retains its own specialist ice navigation officers and crews.
None of this came about by accident, and the driving force behind the company is president and chief executive Sergey Frank, who is a not only a leader but also a genuinely engaging and articulate individual.
According to Mr Frank, over the past 12 months there have been many important decisions made, but what in particular stands out is the progress made with the 'Green Funnel' series of tankers. The vessels are part of a series of six SCF Group tankers: five have been delivered, and the last is currently under construction and due for completion by the end of April. Two tankers will be on long-term time charter to Shell. The rest of the Green Funnel series are already in operation within SCF’s own global trading system. This series of ice-class, 114,000-dwt, LNG-powered Aframax tankers is fuelled by Shell LNG and is operating to emissions standards below those required in the ECA zones in which they operate.
“In October 2018 Shell’s Cardissa, in a ship-to-ship operation, undertook the first LNG bunkering of Gagarin Prospect. The introduction of LNG as a primary fuel was a big step for the large capacity tanker trade. It takes the use of LNG to a different scale, in the way that sail gave way to coal, coal to oil, and now oil to gas,” said Mr Frank.
Another milestone of 2018 was committing to provide five more LNG-fuelled tankers for two Russian oil majors, Rosneft and Novatek. “By 2023 we will have 11 such Green Funnel tankers in service, amounting to over 1M dwt. We are pleased to be pioneers of LNG fuel within the tanker industry, as we firmly believe gas is the optimal fuel of the future”.
Sovcomflot is now finalising its strategy until 2025, and the Green Charter will be a significant part of it, including several projects and initiatives towards decarbonisation. “The main aim is to reduce the carbon footprint of each molecule of energy that is transported. We are analysing the current and future fleet from that angle,” said Mr Frank.
This example of an innovative approach can also be found in the HR area. Mr Frank has introduced an incentive-based model for Sovcomflot’s masters and chief engineers. They are provided with a range of key performance indicators to work to, that build toward long-term rewards. The strategic and philosophical aim is reward and retention.
Turning to advances in operational efficiency, the creation of a Marine Operations Centre in St Petersburg is key to retaining the knowledge and experience of Arctic operations. This is a state-of-the art facility, fully benefiting from digitalisation. The centre has amassed a huge portfolio of digital data, which is used to assist officers and crews when navigating in Arctic waters. This knowledge represents the unique expertise of Sovcomflot, and it is also an important marketing tool to provide charterers with a completely new level of operational control in such a challenging environment.
The Marine Operations Centre functions in conjunction with a training facility which focuses on training crews for marine operations in harsh environments, including courses in navigating vessels in ice conditions with the help of diesel electric and azipod propulsion. In Mr Frank’s opinion, “Being in the service industry, which shipping naturally is, it is not possible to build long-term success if you are not focused on the needs of the client. It is really that simple.