28 Dec 2009 12:52

Long-term plan for civilian shipbuilding in Far East totaling $5bln announced by Putin

VLADIVOSTOK. Dec 28 (Interfax) - A plan has been outlined for civilian shipbuilding to last until 2020 that is expected to total $5 billion, Prime Minister Vladimir Putin announced.

"The plan has been generally worked out. It is compiled in the volume of $5 billion," Putin said at a news conference in Russia's Far East.

He added that when the United Shipbuilding Corporation and its partners launch projects in the Far East, they should be sure that there will be stable and guaranteed demand for their output.

"It is our task to help them compile a rough plan of producing civilian equipment for the next few years and until the year 2020," he said.

Putin said he was speaking primarily of orders by major Russian corporations - Gazprom , Rosneft and Sovcomflot as well as deliveries of fishing and special vessels.

"The fundamental conclusion has been drawn that shipbuilding must be preserved and developed in the Far East," he said.

In this context he said that two major investment projects with combined financing of approximately $700 million will be carried out in Primorye with 75% of the money coming from Russian financial institutions.

Putin said a new shipyard would be built in Chazhna Bay for the manufacture of drilling rigs. The project will be carried out by partners from Singapore. The second project implies the construction of a dry dock and related facilities for the construction of tankers and LNG vessels together with South Korea's Daewoo, the prime minister said.

Putin aid investment in a new ship yard in the city of Bolshoi Kamen, Primorye, would amount to $400 million.

Putin attended a ceremony to mark the launch of the construction of a semi-submersible rig at the existing Zvezda yard in the city.

"This isn't just a new order, but the first stage in the creation of a new enterprise" over a number of decades, Putin said.

Foreign partners would be involved in creating a new yard to build civilian vessels like LNG tankers and others, he said.

"Overall investment will be approximately $400 million," he said, adding that the project could take several decades.

The new rig is being built for Rosneft. "This is a world class rig and meets all environmental safety requirements," said Sergei Bogdanchikov, the oil company's chief. The rig will operate in the Barents, Kara and Pechora seas. Rigs like this cost $700 million each and Rosneft will order another two such Arctic class platforms by 2018 if this order goes well, he said.

Rosneft intends to use this and other rigs to be built at United Shipbuilding Corporation yards to drill 70 new wells on the Russian shelf by 2020, he said. This should access an additional 500 million tonnes of additional oil, he said.

Rosneft and the shipbuilding corporation signed a deal to build 11 vessels of various types in November.

Bogdanchikov said he estimated Rosneft would spend an estimated $2.5 billion-$2.6 billion on 47 new rigs and other vessels to be built at Russian yards by 2018.

Gazprom intends to place orders worth a total of $2 billion with shipyards in the Far East in 2011, said Alexander Ananenkov, the gas giant's deputy chief executive.

They include four methane tankers, capacity 215,000 cubic meters each, costing around $1 billion between them. The tankers should be ready in 2015-2016; and a semi-submersible platform costing around $1 billion and capable of operating at depths of 70-500 meters.

"We'll be funding these orders ourselves, and the vessels will be owned by the company," he said.

Gazprom is due to sign a deal with the Amur Shipyard to build two supply ships costing more than 2 billion rubles between them on December 28. Gazprom intends to place orders for four tankers for the first phase of the Shtokman project at Zvezda. In all, Gazprom needs to build 74 sea vessels, including 11 platforms, by 2020, Ananenkov said. "Only six contracts have been signed so far, and they are all in progress," he said.

Gazprom also needs to build submarine complexes, one of which should be commissioned at the offshore Kirinsky block in 2014.

Ananenkov said around half the assembly parts used to build vessels for the company were foreign-made, and that Russian producers ought to be capable of making them. "It might be a good idea to introduce a quota for Russian parts," he said.