Fifth Novatek icebreaker loads first cargo from Yamal LNG plant
Russia's Novatek has loaded the first cargo from the Yamal LNG facility in northern Russia aboard the Vladimir Rusanov -- the fifth specialized icebreaker vessel to enter service since the plant began operations in early December.
According to cFlow, S&P Global Platts Analytics trade flow software, the Vladimir Rusanov departed the port of Sabetta early Thursday, with the captain showing the Dutch import terminal of Gate as its destination.
A total of 18 cargoes of LNG have now been loaded from Yamal LNG -- more than it had originally expected -- ahead of the startup of exports under the string of long-term contracts it has signed with international LNG players.
Novatek had scheduled to export three cargoes in 2017 after the $27 billion facility loaded its first on December 8, and a further 14 by the end of March.
Since the start of the year Novatek has been loading cargoes every 4-8 days aboard its first four specialized icebreaker vessels -- the Christophe de Margerie, Boris Vilkitsky, Fedor Litke and Eduard Toll -- for delivery into northwest Europe.
Novatek has said it plans a fleet of 15 icebreakers that can load LNG from the Yamal project for shipping eastward to Asian markets in the summer and west to Europe in the winter. Six more vessels are expected in 2019 and two in 2020.
Journeys eastward are expected to start late in the second quarter once sufficient ice melts to allow for vessels to navigate the Northern Sea Route to the east.
The timings of delivery of the icebreakers for Yamal LNG will determine how much LNG can be loaded given the need for the specialized vessels due to the harsh climatic conditions for shipping in the area.
Of the cargoes loaded to date, all have delivered cargoes into northwest Europe, though only four are thought to have stayed there -- the rest have been transshipped or reloaded for re-export to other destinations.
Final destinations have included the US, Spain, South Korea, Jordan and India.
The LNG import terminals of Gate in the Netherlands and Montoir in France have emerged as the facilities of choice for buyers of Yamal LNG looking to switch the gas from Novatek's specialized icebreaker fleet to conventional tankers.
Montoir, in particular, is ideal for transshipment given the fast turnaround that vessels can achieve, an industry source told S&P Global Platts.
From April, Novatek is set to partly switch its export mechanism, supplying cargoes under long-term contracts as well as on a spot basis.
Among the long-term offtakers are project partners Total and China's CNPC, as well as other established LNG players such as Spain's Gas Natural, Shell and France's Engie.
Russia's monopoly pipeline gas exporter Gazprom also has a long-term contract for some 2.9 million mt/year.
The bulk of the long-term, oil-indexed contracts were signed in 2013-15, before LNG spot prices dropped significantly, in part tracking the oil price down but also due to a sharp increase in LNG supplies coming onto the market.
Novatek said in December it expected to ship up to 75 cargoes in 2018, with around half to be delivered under long-term contracts. The remaining cargoes -- including those already loaded this year -- would be sold on the spot market.