Russian tanker companies merge

Russian tanker companies merge Russian President Vladimir Putin has signed a decree to merge the state-controlled Novorossiisk Shipping Co. (Novoship) and state-owned shipping company Sovcomflot.
   The merger will create a company with assets of about $5 billion, one of the five largest in the world, said Sergei Frank, Sovcomflot’s chief executive officer.
   “This consolidation is a logical step given the consolidation process taking place in the world energy sector. The big oil and gas companies are our customers, and this accordingly makes consolidation in the tanker sector a logical process,” he said in a statement posted on Putin’s Web site.
   “Our goal is to turn this company into a national world-class public company. This is not just a question of size but also of the quality of corporate procedures and attractiveness for investors,” Frank said. “Shipping the liquefied natural gas produced as a result of developing Russia’s offshore fields will require considerable financial resources. This is a capital-intensive sector and guaranteed access to the kind of capital required will be essential for both the country’s transport and energy sectors.”
   According to Russian news agency ITAR-TASS the government will transfer its 50.34 percent stake in Novoship to Sovcomflot.
   Tass said Sovcomflot has a 56-ship fleet totaling 4.3 million tons while Novoship has 55 ships, mostly crude and product tankers, with total capacity of 3.5 million tons.
   By consolidating their resources, Frank said the companies “will be able to give more reliable and quality support to the serious projects Russia is currently pursuing in offshore gas and oil production, to future shipments of liquefied natural gas, and to the development of the pipeline transport infrastructure.”
   Frank said Sovkomflot has an order portfolio for 20 ships with total deadweight of around 2 million tons. A sizeable part of these orders have been placed with Russian shipyards. Last year, he said Sovkomflot invested $3 billion rubles ($116 million) in the Russian shipbuilding sector.
   He said Admiralty Shipyards in Russia has begun work to build ships capable of transporting 70,000 cubic meters of LNG.
   Frank said Russia's shipbuilding industry has a niche in providing vessels needed for developing offshore projects in Russia, but that “it is our view that there are no prospects in competing with the new shipbuilding powers such as China in building relatively simple conventional vessels. We need to get involved in high-technology projects, and the possibilities for this exist.
   “Just two weeks ago, we began work on a unique dual-purpose ice-class shuttle-tanker for servicing Gazprom’s offshore projects,” he said. “There are only two or three shipyards in the world able to build such tankers, and we are pleased that the Admiralty Shipyard has taken on this project,” he added. “This is a model for the kind of ships that can and should be built here in the Russian Federation.”