Lukoil deal for Samsung

Korean shipbuilder Samsung will build four ice-class 70,000-ton tankers for Russia?s oil major Lukoil to help it export crude from the Arctic to Western markets. Delivery is scheduled for 2008 and will be used to export crude from the Arctic port of Varandei, where Lukoil?s joint venture with US ConocoPhillips Naryanmarneftegaz, is located. Lukoil is currently short listing shipping companies to operate the new ships. The list includes SovComflot, Murmansk Shipping and Swiss registered trader Western Petroleum.

Naryanmarneftegas is part of a strategic alliance between Lukoil and Conoco, in which Conoco will spend several billion dollars to boost its stake in the Russian oil company to 20% and share its downstream experience abroad with the Russian firm. The $2 billion project will produce 200,000 barrels per day and will export the bulk of crude via Varandei, thus bypassing the state pipeline monopoly and preserving the high quality of crude. The Varandei terminal, which currently exports sporadic small cargoes, is expected to be expanded to 240,000 barrels per day by the end of 2007.