Shell and Sovcomflot sign shipping cooperation agreements

Monday, 29 June 2009

Open Joint Stock Company ‘Sovcomflot’ and Shell International Trading & Shipping Company Limited (Shell) signed a General Cooperation Agreement. The official signing ceremony was held within the framework of the meeting of Russian Federation Prime Minister, Mr Vladimir Putin, with outgoing Chief Executive Royal Dutch Shell plc, Mr Jeroen van der Veer and his successor from 1st July, Mr Peter Voser.

The documents were signed by Mr Sergey Frank, CEO of the Sovcomflot Group of Companies, and Mr Jan Kopernicki, Shell’s Vice President for Shipping.The General Cooperation Agreement covers cooperation between the two companies in potential liquefied natural gas (LNG) shipping projects in Russia, including on the Arctic offshore. The Agreement provides for broadening of cooperation in future Sakhalin II project development, development of joint shipping solutions for natural gas fields on Yamal Peninsula, further improvement of LNG shipping technologies, including in difficult ice conditions, and development of floating storage and regasification units for gasification in remote regions of Russia.

According to Sergey Frank, Sovcomflot CEO, “The signed agreement allows to combine Shell’s profound experience in the production and the transportation of liquefied natural gas with Sovcomflot’s knowledge and technical potential in delivering cargos by sea in harsh ice conditions of the Arctic and Far-Eastern seas. 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 implemented in the offshore fields of the Arctic”.Speaking at the event, Mr Kopernicki said, “Shell and Sovcomflot have for some time worked together on LNG seafarer training and through the development of the Sakhalin II project. 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.

Alongside General Cooperation Agreement, the companies signed time-charter agreements for Sovcomflot’s Aframax type oil tankers to ship Shell’s crude from North West Europe and the Mediterranean.Sovkomflot Group is a major Russian infrastructural company with a fleet of 136 vessels with the aggregate deadweight of 9,6 million tonnes. The company’s current shipbuilding programme includes 24 vessels with the aggregate deadweight of 2,1 million tonnes. Its fleet average age is 6 years (with the global average of 12). Sovkomflot is №1 in the world in the Aframaks segment, № 2 in the segment of product tankers.

Sovkomflot has the largest global ice class fleet and is №1 operator in the segment of Arctic shuttle tankers and ice class LNG tankers. Apart from shipping of hydrocarbons, Sovkomflot provides services for crude transhipment via floating storage units, and develops efficient logistical solutions for transportation of energy resources. Shell’s share in Sovkomflot shipping portfolio makes up to 5% and gradually increasing with the development of oil and gas projects both in Russia and internationally.

Source: Sovcomflot