Russia’s Novatek says it found shipping partner for reloading Arctic LNG in Norway

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The Arctic Voyager LNG tanker on the shores of Finnmark, Arctic Norway. Tschudi Shipping Company will handle reloading of Russian Arctic LNG in Norway, according to Novatek. (Thomas Nilsen/The Independent Barents Observer)
According to the Russian natural gas producer, Norway’s Tschudi Shipping Company will handle millions of tons of LNG from Yamal (Russian Arctic).

The two companies have signed an agreement which allows for ship-to-ship reloading in Norway. The agreement has a time frame of 2-3 years and will provide a temporary logistics solution for Novatek, company deputy board chairman Mark Gyetvay told Russian journalists.

The deal is announced as Novatek CEO Leonid Mikhelson during last week’s Eastern Economic Forum in Vladivostok (eastern Russia) confirmed that “we will use Norwegian territory in the medium-term for loading ship-to-ship.”

Tschudi Shipping Company says to the Barents Observer that it does not yet want to comment.

The Norwegian company owns major seaport and terminal capacities in Kirkenes, the town located only few kilometers from Russia, and has previously been engaged in reloading of Russian oil.

Oil from Lukoil’s Varandey terminal was previously shipped to Kirkenes, Norway, in ice-classed tankers (left) and reloaded to conventional tankers for further transport to the European market. (Thomas Nilsen/The Independent Barents Observer)
Cutting down shipping costs

The energy talks proceed as Novatek, operator of the Yamal LNG project, wants to bring down costs on shipments of natural gas from the ice-covered waters north of Siberia to the markets by cutting sailing distances for expensive ice-class Arctic carriers. The fleet of carriers built for the Yamal project will bring LNG from Sabetta to Norway, where the gas will be reloaded into conventional tankers and subsequently brought to west European ports.

The temporary ship-to-ship logistics scheme will operate until Novatek has ready its planned permanent terminal in the Kola Peninsula. That terminal is likely to be built in Ural Guba, the militarized bay located about 50 km west of Murmansk city and will have a capacity to handle 20 million tons per year.

Novatek in August discussed the Ural Guba project with the Ministry of Defense and top government officials.

The Russian bay has deep and year-round ice-free waters, and is considered among the most favorable spots for shipping and logistics on the Kola Peninsula. In the mid-2000s, company Gazprom long considered to build a hub for its projected Shtokman field in the area. The local Navy base today houses several nuclear-powered submarines, including Sierra-II and Victor-III vessels.

A blow to Norwegian competitor

Novatek’s announced deal with Tschudi is a blow to Norterminal, a competing Norwegian company that has been in talks with the Russians over the same kind of reloading operations.

This summer, Norterminal requested permission from the Norwegian Directorate for Civil Protection (DSB) to start up ship-to-ship reloading operations of LNG in partnership with Novatek. That application included up to 45 ship-to-ship reloading operations on three spots near Kirkenes and Honnigsvåg (both locations in Arctic Norway).

The first operations was to start already in Mid-November 2018.

Related stories from around the North:

Canada: Canada ill-prepared for Arctic shipping boom, G7 sustainability summit hears, Eye on the Arctic

Greenland: Greenland joins push to ban heavy fuel oil in the Arctic, Radio Canada International

Norway: Norwegian supply ships support drilling activities in Russian Arctic, The Independent Barents Observer

Russia: Russia’s Gazprom boosts Arctic gas production and infrastructure, aims foreign markets, The Independent Barents Observer

Sweden: Sweden reluctantly greenlights construction of Nord Stream 2 gas pipeline, Radio Sweden

United States: Economist sees big role for US oil & LNG, but finds hurdles in Arctic, Alaska Public Media

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Atle Staalesen, The Independent Barents Observer

Atle Staalesen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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