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Korean Yard to Build LNG Floating Storage for Murmansk terminal

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LNG carrier. Credit: Jnzl’s Photos / CC BY 2.0

The deal to build two LNG floating storages has been concluded with the Russian State Transport Leasing Company, according to sources. 

When ready, the big floating storages (380,000) cubic meters are to be towed to projected LNG terminal sites in the Russian town of Vidyaevo near Murmansk and Kamchatka.

The barges will become key parts of the logistics schemes developed by Russian natural gas giant Novatek as part of its massive building of LNG projects in the Arctic. Both LNG terminals will serve fleets of ice-class tankers shuttling from natural gas plants in the Yamal and Gydan Peninsulas. Moreover, conventional tankers will accept LNG and deliver it to markets in Asia and Europe. 

Both terminals are expected to be ready for operations by the end of 2022.  Furthermore, in 2024, Novatek and its partners plan to have the Arctic LNG 2 project up running. The project is expected to produce 19.8 million tons per year. All of the liquefied natural gas is exported.

Leasing of Infrastructure

The two floating storages will be owned by the State Transport Leasing Company, as per the deal. However, Arkticheskaya Perevalka, a company controlled by Novatek will be responsible for its operations.

The State Transport Leasing Company recently got a €522 million credit from the Gazprombank, according to sources. The deal with the Korean yard also includes an option to build another two barges.

Ship-to-ship LNG Reloading

The transhipment terminals are expected to significantly reduce the transportation costs associated with the export of the LNG. Currently, the ice-class tankers take care of the direct shipping of the LNG to the markets. However, with the new terminals, conventional tankers that are far cheaper to operate could take over key parts of the deliveries.

Novatek has earlier engaged in ship-to-ship reloading of LNG in the Sarnes Fjord near Honningsvåg town in mainland Norway. The natural gas giant also has plans to establish a temporary ship-to-ship facility near Kildin Island, to be used until the permanent terminal in Vidyaevo is completed. The Kildin facility reportedly was to start working in late 2019 and is still not in operation.

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