Hanwha Ocean Faces $1 Billion Arbitration Claim Over Canceled Russian LNG Carrier Orders

South Korean shipbuilding giant Hanwha Ocean is facing another arbitration claim over canceled orders for ice-class liquefied natural gas (LNG) carriers intended for Russia’s Arctic LNG 2 project.

The claim, worth approximately US$1 billion, was filed by LLC Arctic LNG 2, the charterer of the vessels, at the Singapore International Arbitration Centre (SIAC).

Hanwha Ocean had previously initiated arbitration proceedings against the vessel owners at SIAC, but this new claim is based on a separate contractual relationship.

The dispute stems from Hanwha Ocean’s termination of contracts for the construction of three ice-breaking LNG carriers in May, July, and November 2022, respectively, due to issues related to the Russia-Ukraine conflict and Western sanctions.