Russia commissions its first home-built LNG tanker designed for Arctic operations

Russian shipping company Sovcomflot has received the first Russian-built tanker for transporting liquefied natural gas (LNG) designed to operate in Arctic conditions. Russia has strong ambitions in the global LNG market, but these have run up against Western sanctions in recent years, including in the area of LNG shipping. Russia must now rely solely on domestic shipbuilder Zvezda, as other tanker suppliers cancelled their orders over the threat of sanctions.

In recent years, Russia has sought to make up for lost revenue from natural gas sales to Europe by increasing LNG exports. In this case, however, the country faces a shortage of suitable tankers capable of navigating Arctic waters covered by a thick layer of ice. The lack of suitable vessels is one of the major problems facing the Arctic LNG 2 terminal, which is subject to Western sanctions. Despite this, in recent months Russia has begun shipping liquefied gas to China through the terminal.

Russia's tanker fleet operator Sovcomflot now has its first domestically built Arc7-class LNG tanker. These specialised LNG tankers are designed to operate in Arctic waters, where they can break through ice up to two metres thick. They are therefore crucial to maintaining year-round operations at Russian LNG terminals in the north of the country. According to Reuters, Sovcomflot is expected to receive two more tankers from domestic shipbuilder Zvezda next year.

According to Russian company Novatek, which holds a majority stake in the Arctic LNG 2 terminal, Zvezda is expected to deliver a total of 15 new Arc7-class tankers. The company has ordered 21 such vessels in total. The question remains, however, which other shipbuilders might be able to supply specialised tankers to Russia.

Tanker deliveries run up against sanctions

Russian companies have previously ordered Arc7 special-purpose tankers from foreign suppliers as well. The fulfilment of these orders is highly uncertain. As early as 2022, South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering cancelled an order for an Arc7-class LNG tanker placed by Russian company Sovcomflot. The supplier said the cancellation was due to non-payment.

More tankers were to be supplied by South Korea's Hanwha Ocean: three for Japanese shipping company Mitsui O.S.K. Lines and three for Russian group Sovcomflot. However, this order was cancelled because of sanctions.