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Samsung To Construct Tankers For Russian Oil Major

Naryanmarneftegas is part of a strategic alliance between Lukoil and Conoco

South Korean industrial producer 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, the oil company?s official said on Tuesday, Oct. 11, reported today.

Osman Sapayev, quoted by the Reuters agency, told an oil conference in London the tankers will be built by 2008 and will be evacuating crude from the Arctic port of Varandei, where Lukoil?s joint venture with U.S. ConocoPhillips, Naryanmarneftegaz, is located. He added that Lukoil had yet to choose a winner to own and operate the ships. The firm has already shortlisted three companies including Russian shippersSovComflot, Murmansk Shipping Company 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 percent and share its downstream experience abroad with the Russian firm. Lukoil, Russia?s largest oil producer, has in turn ceded 30 percent in Naryanmarneftegas to Conoco with an aim to launch joint production in Russia?s north later this decade. 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.