Stop accepting orders! The first Chinese shipyard announced its "indefinite" withdrawal from the Russian market
As the United States strengthens sanctions on Russian LNG projects and includes Chinese shipyards in the sanctions list, Wison Clean Energy, as a company that participated in the module manufacturing of the Russian project together with the first sanctioned shipyard, officially announced its "indefinite" withdrawal from the Russian market.
On June 21, Wison Clean Energy disclosed on social media: "After a careful and comprehensive evaluation, the board of directors of Wison Clean Energy has decided to terminate all ongoing Russian projects and will immediately and indefinitely stop taking on any new Russian business. We appreciate the good relationship we have established with our Russian partners in the past and cherish the work we have done together. But considering the company's strategic prospects, we have to make this difficult decision. At the same time, we have decided to sell all our shares in Zhoushan Wison Offshore & Marine Limited."
"We fully recognize the impact this decision may have on relevant partners and employees. We will do our best to properly handle all subsequent matters and ensure a smooth transition. We will also actively seek new development opportunities to lay a solid foundation for the company's long-term development."
Wison Clean Energy's withdrawal will affect the flagship LNG project of Russian energy giant Novatek in the Arctic, the Arctic LNG 2 project, for which Wison Clean Energy is one of the module manufacturers. Last year, Novatek also said it planned to build a gas turbine power station for the Arctic LNG 2 project using equipment from Wison Clean Energy and Guanghan Gas Turbine.
It is understood that the Arctic LNG 2 project is located on the Gydan Peninsula and is the second large-scale LNG project led by Russian energy giant Novatek after the "Yamal LNG" project. The total designed capacity is 19.8 million tons/year, and the three LNG production lines will be put into operation in 2023, 2024 and 2026 respectively.
The Arctic LNG 2 project is an important part of Russia's Arctic strategy and LNG development plan. In 2019, Novatek awarded the $7.6 billion engineering, procurement and construction (EPC) contract for the Arctic LNG 2 project to Technip Energies, which in turn handed over some of the module manufacturing work of the LNG production line to several Chinese shipyards including Wison Clean Energy (then known as Wison Offshore), Penglai Jutao, Bomaike, and Qingdao Wuchuan McDermott.
According to the plan, the modules of the Arctic LNG 2 project will be prefabricated in a Chinese shipyard and then transported to a large assembly plant outside Murmansk. After assembly, they will be towed to the Arctic LNG 2 project site on the Gedda Peninsula in Western Siberia, Russia.
Stop accepting orders! The first Chinese shipyard announced an "indefinite" withdrawal from the Russian market
In this project, Wison Clean Energy has successively undertaken the construction and commissioning of three production lines with a total of about 150,000 tons of integrated pipe gallery modules, including the design, procurement, construction, commissioning and loading of 21 electrical rooms. Among them, the pipe gallery modules on the first production line started construction at the Wison Clean Energy Zhoushan base in December 2019, and the first ship module shipping ceremony was held in August 2021. The two world's largest LNG modules will set sail from Xiushan Island, Daishan County, Zhoushan, Zhejiang. This was the world's largest and heaviest single LNG module at the time.
In 2022, after the outbreak of the Russian-Ukrainian war, Technip Energies announced its withdrawal from the Arctic LNG 2 project under EU sanctions, and foreign workers from the company left the Chinese shipyard site by the end of May of the same year to comply with EU regulations. The Chinese shipyard also stopped assembling large modules at the time, but resumed construction a few months later.
Each production line of the Arctic LNG 2 project consists of 14 modules, which are installed on a gravity-based structure platform (GBS) at Novatek's self-operated assembly plant in Belokammenka. Novatek relies heavily on Chinese offshore shipyards, and all modules of the first production line were manufactured by Chinese shipyards.
According to foreign media reports, many Chinese shipyards are still actively involved in the manufacture of modules for the third production line, especially modules containing power generation units and refrigeration strings. Wison Clean Energy is manufacturing at least four modules for the third production line, two of which, 3-TMR-001 and 3-TMR-002, have been shipped from the Zhoushan base at the end of March this year and are currently on their way to Russia.
Meanwhile, Penglai Jutao may be about to complete at least one module. Bomako and Qingdao Wuchuan McDermott have manufactured modules for the first and second production lines, but currently do not seem to be involved in manufacturing modules for the third production line.
It is worth mentioning that just last week, Penglai Jutao was included in the Specially Designated Nationals List (SN List) by the U.S. Treasury Department's Office of Foreign Assets (OFAC), becoming the first Chinese company to be sanctioned for participating in Russian projects. The U.S. Treasury Department pointed out that the reason why Penglai Jutao became the target of sanctions was that the shipyard "participated in the manufacture and transportation of highly specialized LNG modules, which are specially designed for Russia's Arctic LNG 2 project."
Stop taking orders! The first Chinese shipyard announced an "indefinite" withdrawal from the Russian market
In addition to the Arctic LNG 2 project, in September 2021, Wison (Nantong) Heavy Industries Co., Ltd. also won a $226 million contract from the Russian State Atomic Energy Corporation (Rosatom) to build two 19,100-ton barge hulls for the floating nuclear power plant of Atomenergomash, the machinery manufacturing department of Rosatom. In August 2022, Wison (Nantong) Heavy Industry held a keel laying ceremony for the first barge hull.
This is the first of four floating nuclear power plants that Atomenergomash plans to operate in the waters of Cape Nagliouingen in the Chukotka Autonomous Region, with an installed capacity of 106 MW each. Due to the tight deadline for project implementation and limited shipbuilding capacity in Russia, Atomenergomash decided to hand over the construction of the first two hulls to overseas shipyards. According to the plan, the first hull needs to be delivered before October 2023, and the second should be delivered in February 2024. The two hulls will complete the installation of reactors, auxiliary equipment, control rooms and accommodation areas in Russia.
It is understood that Wison Clean Energy is a leading clean energy technology and solution service provider, committed to providing efficient and integrated EPCIC solutions for the energy industry, including floating liquefied natural gas facilities, onshore standard modular LNG plants, floating natural gas power generation facilities, floating wind power and other clean energy solutions. Based on the successful project delivery record, the experienced Wison Offshore team provides customers with EPC services that meet the highest international quality and safety standards with its professional technical innovation strength and two world-class construction bases.
Earlier on June 20, Wison Clean Energy had just signed an EPCIC contract for a floating liquefied natural gas vessel (FLNG) with Malaysia's Genting Group. This is the third FLNG project undertaken by Wison Clean Energy. Wison Clean Energy is also the only shipyard in China that has built FLNG.
