SCF secures green loan for 2 new shuttle tankers

Russia’s largest shipping company PAO Sovcomflot (SCF Group) has signed a new $110 million credit facility to finance two new ice-class shuttle tankers.

The ten-year loan has been signed with three international banks — ING Bank, SMBC Bank EU AG and UniCredit Bank.

The shuttle tankers, scheduled to be delivered in Q1 2022, are to serve the Sakhalin-1 project — oil and gas development in the Sea of Okhotsk, on the north-eastern shelf of Sakhalin Island, Russia.

Exxon Neftegas, an affiliate of ExxonMobil, is the project’s operator and acts as the charterer for the vessels.

As explained, the new vessels will incorporate advanced design features that meet the latest environmental requirements, providing improved fuel efficiency and decreased CO2 emissions by at least 10% when compared with previous generations of shuttle tankers.

Delivery of the vessels will further enlarge SCF Group’s industrial business portfolio, adding more than $300 million in value to Sovcomflot’s contract backlog, according to the company.

“We are grateful to our long-standing financial partners for their continued support of SCF’s business. We are also pleased that this financing reflected the Poseidon Principles, an initiative by the banking community allowing control of GHG emissions of their shipping portfolios and aimed at decarbonisation of the shipping industry,” Nikolay Kolesnikov, Executive Vice-President & CFO of PAO Sovcomflot, commented.

“This new loan agreement demonstrates the high level of interest and support of international lenders to SCF Group, as well as the company’s uninterrupted access to diversified sources of capital amid the market cyclicality. The completion of this project credit facility allows us to address in full funding requirements for new vessel deliveries in 2022.”

Sakhalin-1 is an international project operated by Exxon Neftegaz. The project consortium also includes Rosneft (Russia), ONGC Videsh (India), and SODECO (Japan). Sovcomflot has served this project since 2006.

Seven SCF vessels are serving Sakhalin-1, including five Aframax shuttle tankers of 1C ice class and two icebreaking supply vessels of Icebreaker ICE-10 ice class.