Sovcomflot secures funding for LNG-fuelled oil tankers

St. Petersburg-based shipping firm PAO Sovcomflot (SCF Group) on Friday (6 April) entered a new $252 million seven-year credit facility arrangement with international banks ABN AMRO Bank, BNP Paribas, Citibank, ING Bank, KfW IPEX-Bank, and Societe Generale.

The funds will be used to finance the construction of a series of six Aframax tankers, the first-ever such vessels purpose-designed to mainly use liquefied natural gas (LNG) as a bunker fuel, currently under construction and due for delivery from Q3 2018 to Q2 2019.

Two vessels will work exclusively for Shell under time-charters for up to ten years; Shell will provide LNG fuel for all the six tankers across North West Europe and the Baltic.

Each 114,000-deadweight tanker will have an ice class 1A hull, enabling safe year-round export operations from regions with challenging ice conditions, such as the Baltic.

“We are delighted to have concluded a new long-term financing agreement for SCF Group, and are grateful to our long-standing financial partners for their continued support of SCF’s business and growth plans,” says Nikolay Kolesnikov, Senior Executive Vice-President, Chief Financial Officer of SCF Group.

“We are also pleased to welcome establishing relations with new international lenders to the group.

“This new loan agreement clearly demonstrates the confidence of international partners in SCF Group despite the current challenges faced by the global economy and the shipping market.

“This is the second successful debt financing accomplished by SCF Group in 2018, which now allows the company to address in full its financing requirements for the newbuilding programme of 2018-2019.”

Photo credit: Sovcomflot 
Published: 9 April, 2018