Russian Shippers Place Massive Order For 60 Ice-Class Ships In Arctic Expansion

Expected to reach full capacity by 2024, Zveda is to be one of the world's largest shipyards in the world.

Situated on Bolshoy Kamen Bay, it was originally constructed during the Soviet era, but is now being revamped from the ground up.

Plans are already underway for the construction of over 60 new vessels, including tankers and world-class ice breakers. The Russian shipbuilding industry is intensely supported by these efforts, which also aim to make the Northern Sea Route a viable path for nautical traffic year-round with Russian vessels holding exclusive rights thereto.

The following clip is taken from Russian TV News. Full transcript below.

Transcript:

Anchor:

"Only Russian vessels should have the right to carry oil and gas along the Northern Sea Route," proposed Vladimir Putin today. This is only one of the measures that would help keep the Russian shipyards busy first of all – the Zvezda complex in Primorye. How else can the government help shipbuilders? Today the Kremlin hosted a special meeting to resolve this issue.

Correspondent:

The first Russian large-capacity shipyard that will produce giant tankers, gas carriers, and even drilling platforms. 

Zvezda is supposed to become one of the largest shipyards in the world. But building a work yard isn't enough, says Putin. We must make sure it's constantly occupied.

President Vladimir Putin:

"I know there's an already approved plan of occupying Zvezda up to 2035. We discussed it with the employees the last time I visited the shipyard. We must be committed to the plan.

Rosneft is executing it, but it does so under my authority. It's not the task of Rosneft alone, but a task of the whole Russian shipbuilding industry. It's a statewide-level task, including the development of our production capabilities and the creation of new workplaces in the Far East.

So I ask you not to view it as a branch – an industry – or a company-specific task, because it's our shared responsibility.”

Correspondent:

The shipyard in the Bolshoy Kamen Bay was built in the Soviet times, however, it's currently being practically rebuilt from scratch. Oil industrialists fund the construction, as well as provide the initial offshore projects.

The work on four new ice-class supply vessels was started in September in the presence of Putin. Catherine the Great, Holy Mary, Vladimir Monomakh, and Alexander Nevsky will be seaworthy by 2019. Rosneft ordered 24 vessels in total, including 5 Aframax-class tankers that run on sustainable gas fuel. Another 15 Arctic-class LNG tankers are on order by Novatek.

But in order to make Zvezda profitable by 2017, many more ships must be built.

Igor Sechin, CEO of Rosneft:

"Rosneft will fulfill its contracts by providing orders for Zvezda. We are talking about 50-60 vessels here. Gazprom will order approximately 32 vessels. By the end of the year, the main contracts will be prepared and signed by Novatek, Sovkomflot, and other clients."

Vladimir Putin:

"I'd like to remind you of the mutual responsibility shared by shipbuilders and their clients. When clients place an order, they must be sure that shipbuilders are committed to the contract. They must know that they'll receive the product of the required quality at an economically sound price and in due course. The owners of the shipyard must ensure adequate financing contingency."

Correspondent:

The shipyard should be operating at full capacity by 2024. Putin has always made it clear that he personally monitors the construction of the largest Russian shipyard in the Far East. But today's meeting in the Kremlin must give an impulse to the development of the entire Russian shipbuilding industry.

The shipyards in Kaliningrad, Murmansk, and St. Petersburg have plenty of orders. The world's largest nuclear icebreaker Sibir was recently launched by Baltiysky yard. Three more are pending. Engineers are already designing blueprints for an icebreaker twice as powerful: Lider – a true arctic off-roader.

Notably, the new Zvezda is well-equipped to build it. There is a process underway for Zvezda to receive a nuclear shipbuilding license, given that Russia is actively trying to make the NSR a global year-round traffic artery.

Ships sailing under the Russian flag were promised an exclusive right to store and ship hydrocarbons in order to support the Russian shipping business.