Localization and Development of Industrial Clusters

Import Substitution and Equipment Localization Program

In efforts to reduce dependence on imports and develop the industrial and engineering potential of Russia, Rosneft developed the Import Substitution and Equipment Localization Program in the Russian Federation for the medium- and long-term, effective since May 2015.

The Program aims at maximizing the share of products, works, and services procured on the Russian market through the development and localization of existing Russian production and maintenance services supporting high-potential projects and the Company’s current operations.

The projected localization level of foreign equipment manufacturing in Russia is 70% by 2025

Scheduled to continue through to 2025, the program includes the following key stages:

  • Seeking existing Russian analogues of imported equipment and providing rationale for their use, thereby encouraging higher manufacturing standards and product quality, as well as promoting import substitution
  • Establishment of partnerships and joint ventures with the world’s leading equipment manufacturers to produce equipment within the Russian Federation
  • Gradual localization of foreign equipment manufacturing in Russia through established partnerships, from assembly to local production, to achieve a localization level of no less than 70% by 2025
Equipment
INDUSTRIAL AND SHIPBUILDING CLUSTER IN THE RUSSIAN FAR EAST

Upon instruction from the President of the Russian Federation, a consortium formed by Rosneft, Gazprombank, and ROSNEFTEGAZ represented by the joint venture, JSC Modern Shipbuilding Technologies (MST), is creating an industrial and shipbuilding cluster in the Russian Far East through OJSC Far Eastern Shipbuilding and Ship Repair Center (FESRC), with a project to build a new core shipyard, the Zvezda shipbuilding complex in Bolshoy Kamen.

The cutting-edge Zvezda shipbuilding complex is scheduled for two phases:

  • Construction from 2012 to 2019 of a hull production block, paint rooms, outfitting docks with an open outfitting berth and a loadout barge for the construction of vessels and marine equipment such as ice-class supply ships, salvage vessels, seismic vessels, tankers, liquefied gas tankers, topsides of drilling and production platforms, floating drilling units, etc.
  • Construction from 2016 to 2024 of a dry dock and full-cycle production shops for the construction of large-capacity vessels and marine equipment such as displacement marine equipment, offshore oil and gas facilities, large-capacity cargo vessels, as well as increasing production capacity for marine equipment and offshore oil and gas facilities

In 2016, the hull production block and paint rooms were commissioned, and commissioning of the open outfitting berth was approved in August 2017.

The project ensures the commissioning of the most modern Russian shipyard, with a metal working capacity of 330 ktpa.

The production program is projected to consist of 178 vessels and marine equipment items by 2035.

The Zvezda product line will comprise high-tech large-capacity vessels, offshore drilling, exploration and production platforms, and both service fleet and ice class vessels.

Special tankers and liquefied gas tankers for hydrocarbon transportation will be essential elements of the production program, their construction will require the Russian shipbuilding industry to develop unique pioneering technical solutions.

The shipyard’s main technological advantage is high production automation, with automated production lines and equipment with numerical control.

Cooperation in Equipment Localization

In 2017, Rosneft concluded a number of important agreements with world-leading companies such as General Electric, Gaztransport & Technigaz, Hyundai Heavy Industries, Samsung Heavy Industries, DSEC, and Lamor regarding the localization of equipment and other products not currently produced in the Russian Federation.

COOPERATION WITH GENERAL ELECTRIC

Within the shipbuilding projects and construction under way at the Zvezda Shipyard, a steerable thrusters production plant was launched in Bolshoy Kamen.

At the 2017 St. Petersburg International Economic Forum, Rosneft and General Electric signed a research and development agreement regarding a new steerable thruster design for large-capacity vessels.

Zvezda Shipbuilding Complex

COOPERATION WITH GAZTRANSPORT & TECHNIGAZ (GTT)

In June 2017, a Memorandum of Understanding was signed on the design and construction of Cargo Containment Systems and LNG carriers in the Russian Federation. The Memorandum includes preparing the Zvezda Shipbuilding Complex for LNG carrier construction. An agreement was signed at the Eastern Economic Forum for technical evaluation of the shipbuilding complex’ capabilities for building membrane LNG containment systems necessary for the subsequent purchase of GTT’s license to build LNG carriers. The Zvezda Shipbuilding Complex has passed GTT’s initial audit.

COOPERATION WITH HYUNDAI HEAVY INDUSTRIES (HHI)

During the St. Petersburg International Economic Forum and the Eastern Economic Forum, Rosneft and Hyundai Heavy Industries signed several documents enabling the continued cooperation to build Aframax class oil tankers through the Zvezda–Hyundai joint venture, including technical support in designing, engineering, building, and technical documents development for building Aframax class vessels.

The cooperation will provide the Zvezda Shipbuilding Complex with documentation allowing the construction of a series of Aframax tankers for transporting oil between Baltic Sea ports. The vessel’s technical documentation is to be developed by the Lazurit Central Design Bureau under the HHI’s design supervision.

COOPERATION WITH SAMSUNG HEAVY INDUSTRIES (SHI)

In September 2017, Heads of Agreement were signed by the Zvezda Shipbuilding Complex and Samsung Heavy Industries at the Eastern Economic Forum, establishing a joint venture to manage shuttle tanker construction projects.

Cooperation with Samsung Heavy Industries enables shuttle tanker construction to be launched at the Zvezda Shipbuilding Complex, as well as procurement of a set of materials and shipboard equipment with the prospect of future localization.

COOPERATION WITH DSEC

Following the Memorandum of Understanding dated 2 September 2016 at the Eastern Economic Forum, a subsidiary of JSC FESRC, LLC Far Eastern Design Institute Vostokproektverf, and Korean DSEC Co., Ltd signed an agreement to establish a joint venture specializing in shipyard construction design, engineering, procurement, management, and supervision.

COOPERATION WITH LAMOR

At the Eastern Economic Forum, the Company signed an agreement with Lamor to establish a joint venture in manufacturing oil spill response equipment at the JSC 82 Ship Repair Plant. The required legal documentation for the joint venture is currently being prepared by Rosneft and its Finnish partners.

SAPPHIRE APPLIED ENGINEERING AND TRAINING CENTER

PROJECT TO DESIGN STEERABLE THRUSTERS

Rosneft, General Electric, and LLC Sapphire Applied Engineering and Training Center (Sapphire Center) are conducting a project to design and localize the production of steerable thrusters, a key component of marine electric propulsion systems.

In 2017, a research contract with General Electric was signed at the St. Petersburg International Economic Forum for the purpose of developing a new design for steerable thrusters for large-capacity vessels, which will complement the plant’s product range by increasing the capacity up to 15 MW on large-capacity tankers and LNG carriers.

Currently, the draft design of 7.5 MW steerable thrusters is in development for reinforced ice-class multi-functional support vessels, which are currently under construction at the Zvezda Shipbuilding Complex. Technical documents were officially approved by the Russian Maritime Register of Shipping, initiating the procedure of procuring and manufacturing long-lead components.

Marine equipment

CONSTRUCTION OF A COASTAL SUPPORT BASE FOR OFFSHORE PROJECTS

Rosneft is continuing to build a supporting infrastructure for oil and gas projects on the Russian Arctic shelf at Ship Repair Plant 82 in the residential area of Roslyakovo in Murmansk.

Along with conserving and upgrading the plant’s ship repair facilities are plans to construct a coastal support base on the premises for offshore projects, as well as an oilfield service equipment production block, and an infrastructure to produce concrete gravity-based structures with a facility for assembling topsides for oil and gas platforms and LNG plants.

The project was driven by the need to reduce dependence on foreign manufacturers, cut production costs, and localize the production of high-tech components.