Arctic LNG 2 Takes Hanwha Ocean to Arbitration Over Cancelled LNG Carrier Contracts

Arctic LNG 2 has filed an international arbitration claim against Hanwha Ocean over cancelled contracts for icebreaker liquefied natural gas (LNG) carriers. The project company, controlled by Russian gas group Novatek, claims that Hanwha Ocean breached a 'step-in' agreement that allowed the charterer to take the place of a defaulting shipowner within a vessel order.

The dispute concerns six Arc7-class LNG carriers originally intended for Arctic LNG 2's transportation needs. However, after Western sanctions targeting Russia's maritime sector were imposed, Sovcomflot became unable to meet payments owed to Hanwha Ocean, leading the South Korean shipyard to cancel its portion of the contract in several successive stages.

The three vessels intended for Japanese shipowner Mitsui O.S.K. Lines were completed by the shipyard but could not be chartered due to international sanctions on Arctic LNG 2. The same set of cancelled contracts is already being targeted by entities linked to Sovcomflot in an earlier arbitration, filed shortly after the initial cancellations.

The arbitration claim comes just days after TotalEnergies completed the sale of its 10% stake in the project to NordLine, a Novatek subsidiary. The transfer ends the French oil major's presence in the capital of Arctic LNG 2, reinforcing Novatek's central position in the project's ownership.