SCF’s LNG powered Aframax tackles the NSR

Aug 30 2019


On 26th August, 2019 ‘Korolev Prospect’, Sovcomflot’s LNG-fuelled Aframax, began a Northern Sea Route (NSR) transit.

She will become the first large-capacity crude oil tanker to sail the length of the NSR using only LNG as fuel, SCF said.

The tanker will deliver a cargo of crude loaded at Murmansk to China. The journey along the NSR, from Cape Zhelaniya to Cape Dezhnev, will take about eight days, with the vessel sailing at an average speed of 12 knots.

While transiting from the Laptev Sea to the East Siberian Sea, the vessel will follow the ‘Tikhonov’ deepwater route that lies north of the New Siberian Islands, which was first opened for commercial shipping in 2011 by SCF’s tanker ‘Vladimir Tikhonov’.

The Aframax crew includes Vasily Yermakov, one of the most experienced ice captains in SCF’s fleet, who will act as an ice adviser during the voyage. 

Today, SCF has six LNG-fuelled crude oil tankers in operation plus five more under construction. ‘Korolev Prospect’, delivered in February, 2019, has a deadweight of 113,232 tonnes, a length of 250 m, breadth of 44 m, and is of Ice Class 1A hull notation. 

Meanwhile, this week SCF reported a profit of $91 mill for the first half of this year, compared to a loss of $57.8 mill for 1H18.

The significant turnaround in the Group’s performance reflected success in industrial projects and improved market conditions, SCF said.

Gross revenue for 1H19 was $828 mill, compared with $710.1 mill for 1H18, while EBITDA was reported as $381.2 mill, compared with $267.7 mill.

Sergey Frank, SCF’s President and CEO, said: “The company achieved significant growth in the first half of 2019 compared to the same period in 2018, exceeding our budget plans. The successful operation of SCF’s vessels serving industrial oil and gas projects, together with the growth of revenues from fleet operations in the conventional tanker market segments (oil and petroleum products), reflected certain improvements in the freight market, although spot rates did not reach their historical averages.

“The main direction of the Group's strategy to 2025 was approved by the Board of Directors on 23rd May, 2019. It envisages a steady increase in Sovcomflot’s operational and financial performance through further growth in the share of advanced vessels servicing large-scale energy projects in the Arctic Sea Basin, as well as through continued dedication to operational excellence and highest safety, sustainability and quality standards achieved with a reduced environmental impact - in line with Sovcomflot’s philosophy of ‘Safety Comes First’.

“We will continue delivering competitive services to our clients using cutting edge pioneering technologies and preserving our highly-professional pool of human resources at sea and ashore.

“Based on the supply-demand ratio forecasts for tanker tonnage, and taking into account the seasonality factor, we remain cautiously optimistic about the results for the second half of the year, as well as the prospects for 2020,” he said.

Evgeniy Ambrosov, Senior Executive Vice-President, said: “In H1 2019 we reached important milestones, celebrating the 10th anniversary of the start of LNG shipments from the Sakhalin-2 project by the ‘Grand Aniva’ and ‘Grand Elena’ LNGCs and the 10-millionth tonne of oil transported by the ‘Mikhail Ulyanov’ series of tankers from the Prirazlomnaya platform,” he said.

Igor Tonkovidov, Executive Vice-President, COO and CTO, said: “Environmental safety and compliance with the principles of sustainable development are very important elements of the company's Strategy-2025. In July, we marked the first year of operating the world’s first large-capacity oil tankers fuelled by LNG. The accumulated data from this period shows that using LNG enables a 30% reduction in CO2 emissions, compared with similar vessels powered by traditional fuels. This reduction exceeds the original design expectations. By 2023, we expect to double the number of LNG-fuelled tankers we operate. The company continues its systematic research work on implementing more efficient and environmentally friendly engineering solutions for maritime transport.”

Nikolay Kolesnikov, Executive Vice President and CFO, added: “In the first half of 2019, Sovcomflot achieved steady financial results across all business segments, reflecting the underlying strength of our business model and the improved operating conditions in the conventional tanker markets during the period. The liquidity position remains strong, and the contracted capex programme has been fully funded. Future contracted revenues at the end of the period totalled $8.1 bill, providing good visibility and stability of future earnings and cash flows. In May, the international ratings agency Fitch upgraded the Group’s corporate credit rating to BB+, with a stable outlook, reflecting its confidence in our business and strengthening of Sovcomflot’s credit metrics, Moody’s and Standard and Poor’s also affirmed their credit ratings.”

 



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