Sovcomflot continues negotiating construction of 5 remaining ships for Yamal LNG
MOSCOW. July 1 (Interfax) - Sovcomflot continues to negotiation construction of five remaining LNG carriers for the Yamal LNG project.
"The group continues intensive talks on construction and operation of additional ships for the project," Sovcomflot said in its financial report.
"All investment projects approved for implementation in the Sovcomflot group of companies use the same economic effectiveness criteria: an internal rate of return over 10% not including the risk premium calculated taking into account the specifics of a given project," it said.
As a rule, 20%-30% of financing for investment projects comes from internal group resources and the other 70%-80% comes from borrowing.
The Yamal LNG project requires 16 Arc7 LNG carriers with capacity for 172,000 cubic meters. All of the ships will be built at South Korea's DSME shipyard. Construction of the first tanker, which Sovcomflot will operate, began in September 2014. It was thought that Sovcomflot would also build and operate five more of the ships, but the company has yet to sign a contract. The management company for the project, JSC Yamal LNG, ordered the five LNG carriers itself in order to confirm the shipyard reservation.
The remaining 10 ships will be built by two consortiums: Canadian-Chinese Teekay/China LNG Shipping ordered six of the LNG carriers at a total cost of $2.1 billion and Japanese-Chinese Mitsui O.S.K. Lines/China Shipping ordered four at a total cost of about 100 billion yen (about $984 million).