28.03.2008 - Aker bid key to revival of Russia fleet

Russia needs ice tonnage and Aker's German arms are the likely winners.

German shipyards could spearhead a renewal of the Russian fleet, including the building of Arctic LNG carriers and oil tankers, following a decision by Aker Yards to sell a large stake in its merchant-vessel division to Russian state investor FLC.

TradeWinds has learned that buyer FLC is setting up a meeting, likely in Oslo, Norway, as early as next week to kick-start potential projects involving Russian owners.

Subsidiary FLC West is paying EUR 292m ($461.2m) for a 70% stake in a company controlling two of Germany's most modern facilities, Aker Yards Wismar and Warnemunde, as well as Aker Yards Ukraine in Nikolaev.

The yards in eastern Germany are currently building four icebreaking 18,000-dwt cargo-containerships for Russian mining giant Norilsk Nickel.

Also, Russia needs ice-class LNG carriers to lift cargoes from locations including Shtokman and Sakhalin, as well oil tankers able to operate inside the Arctic circle.

"We are confident that the workload and workplace will be better secured in future," said Aker Yards Merchant Vessels spokesman Matthias Trott.

Warnemunde is already the base for Aker's specialist LNG unit, which has been working on a new tank-containment system. Employees, who form part of the merchant-vessel division, are drawn from the group's yards in Germany, France, Finland and Norway. They co-operate closely with Norwegian classification society Det Norske Veritas (DNV).

FLC's first action after signing up for a majority shareholding in the German and Ukrainian yards was to initiate next week's gathering to discuss possible projects. As TradeWinds went to press, it was unclear who would be attending but it is likely to include future Russian customers.

Trott says huge potential exists to "build a lot of vessels", including urgent renewal of the Russian merchant fleet, which has a high average age.

He welcomes FLC's involvement, as it give better access to the Russian market for newbuilding contracts, as well as securing jobs in an area of Germany suffering the country's highest unemployment and where shipbuilding is the main industrial employer.

Aker Yards indicates in a presentation that it is willing to transfer technology to its new Russian partner.

Norilsk Nickel's cargo-containerships are already being built using a double-acting-ship (DAS) design developed by ice specialist Aker Arctic Technology, which is majority owned by Aker Yards.

The high-value German-built vessels are for delivery between the third quarter of 2008 and the first quarter of 2009 to transport metallurgical products between Dudinka harbour and Murmansk. Supplies will move in the other direction.

The Helsinki-based research outfit's DAS concept is also being used by Sovcomflot to build panamax tankers at Admiralty Shipyards in St Petersburg to trade through ice.

Aker Arctic Technology has also been collaborating with engine manufacturer Wartsila on a revolutionary new design for a 70,000-dwt ice-class tanker system to exploit oil-and-gas resources in the Arctic.

At the same time, Admiralty has been working with Sovcomflot on a project to build ice-class LNG tankers of around 70,000 cbm, for which it has been searching for a foreign technology-transfer partner.

Trott says Warnemunde and Wismar have the workforce to build LNG carriers for Russia. A feasibility study involving the new containment system has involved Norway's Hoegh LNG.

"We will see what the future brings," said Trott. He is unable to confirm who will attend next week's meeting prompted by FLC.

Closer co-operation with Russia could also benefit Aker Yards because Russia's ageing fleet of nuclear icebreakers also needs replacing. Development work has started with comparative ice-model testing by Aker Arctic Technology.

Finland has built around 60% of all the world's icebreakers, including the nuclear-powered NS Vaigach (built 1990) and NS Tamyr (built 1989) in Helsinki, although reactors and steam-propulsion systems were installed in Russia.

Meanwhile, FLC gains access through its deal to 2,312 employees and 110 apprentices at Wismar and Warnemunde, as well as 2,565 workers and a handful of apprentices in Ukraine.

The German yards are heavily focused on building containerships with 23 deliveries stretching into the third quarter of 2010.

The tally includes boxships for owners such as Konig&Cie, Gebruder Winter, NSB Niederelbe and Carsten Rehder. Stena Line has two ropaxes on order. The yard in Ukraine is also a sub-supplier of hulls for Aker Yards Germany and Aker Yards Floro, which is not part of the FLC deal.

Geoff Garfield, Tradewinds

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