French engineering group Gaztransport & Technigaz (GTT) has announced the suspension of the development of 15 ice-breaking LNG carriers in Russia.
This comes following an analysis of European sanction packages number eight and nine which prohibits engineering services with Russian companies.
Prior to these developments, GTT was involved in the design of 15 ice-breaking LNG carriers in Russia, under construction by the Zvezda Shipbuilding Complex. GTT was also involved in the design of three GBS1 for Saren B.V.2.
As of 1 October 2022, revenues of Zvezda’s LNG carriers accounting for €74 million ($78.86 million) remained to be recognised by 2025, and €12 million ($12.7 million) from the GBSs by 2027, a total order book exposure of less than six per cent, according to GTT.
However, the contract with Zvezda will be suspended as of 8 January 2023, and GTT’s interventions will be limited, on the two most advanced LNG carriers, to ensure the safety of the projects and the integrity of the technology, in compliance with the international sanctions in force.
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The GBS project will also be suspended with the terms of GTT’s departure currently being finalised.
These elements will have a financial impact mainly from 2023.
GTT’s order book will no longer include projects in Russia in the future. Additionally, GTT’s annual target will exclude the revenues and EBITDA that would be generated by the last services in progress in Russia from 2023 onwards.
However, construction orders for six ice-breaking LNG carriers and two FSUs3 in Asian shipyards intended for Russian Arctic projects, will continue as planned.
As of 1 October 2022, these orders represented a total revenue of €31 million ($32.9 million) for GTT to be recognised by 2024.
