Our Arctic Neighbors: Shell planning Russian Arctic development

Click here to read the PDF version of this story.
Print this story | Email it to an associate.

Experience cooperating with shipper Sovcomflot on Sakhalin II project will transfer to natural gas fields on Yamal Peninsula

Sarah Hurst

For Petroleum News

Russia’s largest ship owner, state-run Sovcomflot, has signed an agreement with Shell International Trading and Shipping Co. for cooperation in potential liquefied natural gas shipping projects in Russia, including on the Arctic offshore, Shell said in a June 27 release. The two companies plan to cooperate on future Sakhalin II project development, development of joint shipping solutions for natural gas fields on the Yamal Peninsula, further improvement of LNG shipping technologies, including in difficult ice conditions, and development of floating storage and re-gasification units for gasification in remote regions of Russia.

“The signed agreement allows us to combine Shell’s profound experience in the production and transportation of liquefied natural gas with Sovcomflot’s knowledge and technical potential in delivering cargos by sea in the harsh ice conditions of the Arctic and Far Eastern seas,” said Sergey Frank, Sovcomflot’s CEO. “This long-term international project is aimed at working out highly effective and ecologically safe transportation and logistical solutions for Russia’s future oil and gas projects to be implemented in the offshore fields of the Arctic.”

“Shell and Sovcomflot have for some time worked together on LNG seafarer training and through the development of the Sakhalin II project (in the Russian Far East),” said Jan Kopernicki, Shell’s vice president for shipping, who signed the agreement on behalf of the Dutch company. “The signing of these agreements builds on this and allows us to share our respective skills in LNG and Arctic shipping to support future Russian LNG projects,” he added.

The agreement was signed during a meeting between Russian Prime Minister Vladimir Putin, Shell’s outgoing CEO, Jeroen van der Veer, and van der Veer’s successor from July 1, Peter Voser.

Sovcomflot has a fleet of 136 vessels, including the largest ice-class fleet in the world, according to the release. In addition to the transpiration of hydrocarbons, Sovcomflot provides services for crude transshipment in floating storage units, and develops logistical solutions for transportation of energy resources. Shell has a 5 percent share in Sovcomflot’s shipping portfolio, which is gradually increasing with the development of oil and gas projects in Russia and internationally.