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Sovcomflot signs first LNG-fuelled product tanker newbuildings order

Tradewinds

Contract for MR series at Zvezda follows aframax deal with the same yard in September

Russian giant Sovcomflot (SCF Group) has placed its first order for LNG-fuelled product tankers by inking a trio of ships at Zvezda shipbuilding complex.

The 51,000-dwt series marks a step forward in the shipowner’s fleet-renewal efforts, having previously ordered LNG-powered aframax crude tankers.

Sovcomflot confirmed the deal today, explaining the ships would boast 27% lower CO2 emissions, as well an 85% cut in NOx output.

With IMO 2020 rules just one year away, it also noted the ships will have zero SOx emissions.

Sovcomflot, one of the world’s largest tanker owners, has been a pioneer in the use of LNG as the primary fuel for large oil tankers.

It is in the process of taking delivery of a series of LNG-powered aframaxes from Hyundai Samho Heavy Industries, which were ordered against long-term contracts with Shell.

Zvezda also has two 144,000-dwt LNG-fuelled aframaxes under construction for Sovcomflot, which were ordered last September.

However, the MR tanker contract signed over Christmas represent a first move from the shipowner to refresh its product tanker fleet.

Newbuildings in the past few years have focused on the project side of the business as well as the crude sector.

Chief financial officer Nikolay Kolesnikov told TradeWinds in August 2018 that the company had an eye on the renewal of its tanker fleet, with secondhand ships excluded and newbuildings topping the shopping list.

“On the conventional tanker side, we need to maintain an adequate age profile of the operating fleet, so obviously we will be replacing some of the assets that are being retired,” said Kolesnikov at the time.

“To just speculate and use the currently depressed S&P market to acquire some assets … we are not very good at speculating,” he said.

“That is not our business. Our business is provision of shipping services to core customers.

“With a secondhand asset, like with a secondhand car, you are inheriting somebody else’s history and problems.

“For us as an owner and operator, we like to determine the specific assets and designs and stay with it from inception, supervise its construction and then hammer on and operate the assets.

“First and foremost, the asset has to be built for a purpose.”

In all, Sovcomflot has a fleet of 144 vessels — 80 of which are ice class — of a total 12.5 million dwt.