Russian shipyard cancels contracts with Samsung Heavy Industries

Industry

Published: 13 Jun. 2024, 19:31

Russian shipyard cancels contracts with Samsung Heavy Industries

The corporate logo of Samsung Heavy Industries [YONHAP]

Korean shipyard Samsung Heavy Industries said Thursday a Russian shipyard unilaterally canceled supply contracts worth billions of dollars.

Russia's Zvezda Shipbuilding Complex recently canceled a combined $4.2 billion worth of contracts signed in 2019 and 2020 with Samsung Heavy on designing 15 liquefied natural gas (LNG) carriers and seven shuttle tanks, according to the Korean company.

The Russian shipyard asked Samsung Heavy to return the $800 million it already paid in advance and a delay charge.

It also revoked its order for 17 remaining vessels to be designed, excluding the five LNG carriers Samsung Heavy already delivered, according to officials.

Under the deal, the Korean company had dispatched its workforce to Zvezda to design a total of 22 vessels, but the workers pulled out of the shipyard after Russia invaded Ukraine in early 2022.

Amid the ongoing war, the United States issued a series of sanctions against Russia to pressure Moscow to end its conflict with Ukraine, making it impossible for Zvezda to operate.

Samsung Heavy said it will file a suit with the Singapore International Arbitration Center against the Russian shipyard for the contract revocation, saying Zvezda's move is unfair.

Yonhap