Sovcomflot backs LNG fuelling as way forward for its growing fleet



All of Sovcomflot (SCF Group)’s future newbuildings will be LNG-fuelled as the company moves ahead with its strategy for energy-efficient vessels, new president and chief executive Igor Tonkovidov said.

Speaking to TradeWinds for the first time as head of the Russian shipowning giant, Tonkovidov said: “If we are building for our own operation, yes, it has been decided that they will be LNG-fuelled.”

The only exception to the LNG-fuelling choice will be if the end-customer asks us specifically not to include this, he added.

“We believe in gas and we are set to go down this road,” he said, referring to the company’s new 2019-2025 strategy. “Up to now, we are happy and satisfied with our choice.”

Sovcomflot, working closely with energy major Shell, has pioneered the development of LNG-fuelled aframax tankers and put six such vessels on the water.

It conducted the initial LNG-bunkering operation for the first of these — the 114,000-dwt Gagarin Prospect (built 2018) — a year ago and now has a further two aframaxes and three MR tankers on order at Russia’s Zvezda Shipbuilding Complex, all of which will use LNG as a fuel.

Aside from LNG, Tonkovidov said Sovcomflot will also use IMO 2020-compliant fuels on its fleet — but it will not use scrubbers.

The former chief technical officer said he does not want to dwell on scrubbers as it is a lawful technology that has been chosen by some companies. But he added: “Let’s talk in two years’ time.”

Tonkovidov admitted that Sovcomflot’s LNG-fuelling journey has not been easy.

The company started planning its Green Funnel aframaxes in late 2014 when there was no infrastructure or visible places to use the ships.

He stressed the need for qualified engineering staff, properly trained crews, and the right partners in shipbuilding and ports that can accept vessels and promote this business.

“It took us a couple of years to run around all these people and to bring together all these pieces of the puzzle,” Tonkovidov said.

Shell chartered two of the ships, and Tonkovidov said he does not think the project would have progressed without the energy major’s partnership.

“Both companies enriched each other during the course of this project,” he said. “More importantly, we created an LNG-bunkering standard which is now becoming common for the industry.”

Ahead of the pack

Looking at the incoming regulations back in 2015, he said: “Weighing it up, we found that simple compliance is more costly than to be a little bit ahead of the pack.”

He said LNG “perfectly fitted the picture”, meeting the SOx limits, working well with Tier III regulations, helping eradicate particulate matter and allowing the company to cut its greenhouse gas emissions by 30%.

Other carbon-neutral fuels are simply not available in the market, he said.

“You can talk, you can plan, you can do some initial studies, but life is going on and we better be going on with the cleanest available fuel which immediately contributes to the IMO’s ambitious route to reduce CO2 gas emissions by at least 50% by 2050,” he said.

Tonkovidov is excited by his new role but describes it as a “big challenge” to succeed Sergey Frank, who has headed the company for 15 years.

“He is an exceptional personality,” he said. “You are always compared with him. It is a challenge.”

He said he is happy Frank is staying on as chairman of the board to actively participate in developing Sovcomflot’s strategy, which he has to implement.

Tonkovidov said the company has to grow both fleet wise and financially with the most energy-efficient vessels that will have the least environmental impact.

Sovcomflot is already strong on Russian business and is currently deep in what he said are “intense negotiations” for the vessels needed for the Arctic LNG 2 project, which are set to be built in Russia.

But as the company pushes to expand its international reach, Tonkovidov said it will be about achieving the right balance between offering the more competitive but also the best solution.

“You need the experience, and you need the knowledge and know-how,” he said. “It works.”