Sovcomflot sales add fuel to brisk S&P activity in LNG sector

According to recent S&P activity tracked by VesselsValue, EPS bought the Sovcomflot vessels SCF Barents (renamed Kool Firn), SCF Melampus (renamed Kool Baltic), SCF Mitre (renamed Kool Boreas) and SCF Timmerman (renamed Kool Orca) in bank sales ranging from US$150M to US$200M. The sales were reported closing on 12 May.

“Currently, Sovcomflot vessels are disappearing at a frantic rate on the secondhand market in the face of tightening sanctions,” said maritime consulting firm BRL.

Russian sanctions are also roiling the LNG newbuilding market. As LNG Shipping & Terminals previously reported, South Korea’s Daewoo Shipbuiliding & Marine Engineering (DSME) has cancelled the order for the first of three ARC7-class ice-breaking LNG carriers for Russian state-controlled Sovcomflot. DSME reported in a filing that the order was cancelled because Sovcomflot had missed a payment.

These specially designed, 172,600-m³ LNG carriers have ice-breaking hulls, podded propulsion systems and GTT Mark III membrane containment systems to allow them to move LNG from LNG projects located in the Russian Arctic. Each vessel in the series carries a price tag of US$283M.

Commenting on the cancellation of the first ARC7 LNG carrier ordered from DSME, BRL noted, “This is the first newbuild affected but the situation is bound to accelerate. It could prove bad news for South Korea which is building a large number of gas carriers and tankers for Russia. The only consolation is such vessels where payments default can find new buyers on the international market quickly.”

Among the other notable secondhand sales recorded between January and April 2022, was for eight tri-fuel-diesel-electric LNG carriers (Golar Bear, Golar Crystal, Golar Frost, Golar Glacier, Golar Ice, Golar Kelvin, Golar Seal and Golar Snow) acquired by newly formed CoolCo from Golar LNG. The largest shareholder in CoolCo is EPS with a 38% stake, with the remainder held by Golar LNG (31%) and the public (31%).

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