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Russian, South Korean firms sign MOU on Far East engineering, shipbuilding cluster

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Russia's Rosneft, Gazprombank and Sovcomflot have signed a memorandum of understanding with South Korea's Daewoo Shipbuilding and Marine Engineering Co. (DSME), to jointly develop an engineering and shipbuilding cluster in Russia's Far East, Rosneft said in a statement Wednesday.

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The companies have agreed to launch the Zvezda shipbuilding complex as well as a Russian-Korean engineering center for shipbuilding and marine equipment for offshore projects, in the southern part of the Primorsky region in Russia's Far East. The Zvezda complex is provisionally slated for completion in 2016.

Rosneft has a large-scale program to develop offshore projects in Russia in challenging conditions, CEO Igor Sechin said, commenting on the MOU.


"The company assumed obligations to localize shipbuilding and marine equipment production in Russia necessary for offshore project implementation and is already working actively in this direction," Sechin said, according to the Rosneft statement.

The MOU was signed during a state visit by Russian President Vladimir Putin to South Korea.

On Tuesday Putin said Russia would like to revive the idea of a shipbuilding cluster in the region and has long been in talks with South Korean partners, although various problems have hindered practical work.

Russia is planning to develop the shipbuilding cluster on the basis of the United Shipbuilding Corporation to build various types of vessels, including that to be used for development of offshore oil and gas fields and navigate through the Northern Sea Route.

"Preliminary estimates show that we could need 512 ships worth a total value of Rubles 6.5 trillion [more than $195 billion] over the period to 2030," Putin said in late August at a government meeting on developing shipbuilding in Russia.

Major Russian companies such as Rosneft, Gazprom and Sovkomflot have been placing orders for vessels through to 2030 and "our shipbuilders will need to make their best possible efforts to fight for these orders and turn them into real contracts," he said then. Russian companies are ordering new vessels at foreign shipyards, including in South Korea.

--Rosemary Griffin, rosemary.griffin@platts.com
--Edited by Jonathan Fox, jonathan.fox@platts.com