Putin’s Demand of Novatek to Find a Russian Shipbuilder Puts DSME in Danger
Time：2014-07-01
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The DSME is looking to earn US$14.5 billion (14.8 trillion won) from the orders this year, and if it receives all 16 LNG ships of the Yamal gas project, it will be able to reach 33% of its annual goal. However, as of May, the total amount of orders it received is US$1.9 billion (1.93 trillion won), only 13.1 percent of the annual goal.
Specialists expected to have all contracts signed by April, but they are being postponed further and further. So, the domestic steel industry supplying the material to DSME for shipbuilding is becoming anxious.
President Putin strongly proposed building LNG ships in Russia with Novatek, Russia’s largest private gas company that holds 60 percent of the shares of Yamal gas project, early this month.
President Putin said, “You all want to order abroad. If there won’t be orders [in Russia] then there won’t be any development [of shipbuilding in Russia] either. I ask you to work on this properly.” He also added, “I ask you to look to the Russian producer.”
Novatek’s boss Leonid Mikhelson replied, “But there is no such capacity at present. We’re now working with the management of United Shipholding Corporation (USC) so that these orders could be placed in Russia.”
Putin asked Mikhelson whether his company would join the shipbuilding consortium developing the Zvezda yard in the far east of Russia.
But Mikhelson said, “We would prefer to participate in shipyards that USC has in the north of the European part of Russia.”
“This is also possible,” Putin replied.
Russian owner Sovcomflot has ordered the first US$316 million ship for the project at DSME in Korea.
Of the next 15, Sovcomflot will order numbers two and three in the series.
It has been earmarked for six in total, with Teekay set to contract another six and MOL four.