The Zvezda shipyard is the largest facility in Russia to build heavy oil, LNG tankers

The Zvezda shipyard is the largest facility in Russia to build heavy oil, LNG tankers

The Zvezda shipyard is the largest facility in Russia to build heavy oil, LNG tankers

Defence deals and cooperation on atomic energy projects have dominated the discourse in India-Russia ties ever since the fall of the Soviet Union. Some years ago, analysts joked the agenda of an overseas trip of Russian President Vladimir Putin would inevitably revolve around “guns, uranium and oil”. Over the past decade, Russia has attempted to change this perception of being just a mere supplier of defence equipment alone.

It is in this backdrop that Prime Minister Narendra Modi and Putin visited the Zvezda Shipyard on the bay of Bolshoy Kamen in Russia's Far East on Wednesday. Officials noted the visit by Modi and Putin to Zvezda aimed at learning about Russia's new capabilities in shipbuilding and exploring cooperation in the area. Modi tweeted about his visit, noting, “During our visit, President Putin showed me cutting edge technologies at the shipyard. My visit opens up new pathways of cooperation in this important field.”

The Zvezda Shipyard is meant to be largest facility in Russia for building commercial vessels. According to the UK's Royal Institute of Naval Architects, the “Zvezda shipyard is intended to be the jewel in the crown of new Russian shipbuilding”. Work to modify Zvezda, previously a military facility, for commercial production began in 2009 and the ceremonial start to production happened in September 2016. Construction work on the Zvezda shipyard complex is still continuing, with work expected to conclude by 2024. By 2024, Russian officials claim Zvezda shipyard will employ over 7,000 people.

The Russian government and companies envisage that Zvezda will be used to build large oil tankers to ferry Russian crude across the world. Zvezda is expected to have the capacity to build oil tankers with a displacement of up to 350,000 dead-weight tons and length of up to 300 metres. Dead-weight tonnage is the weight of a ship when fully loaded with personnel, cargo and supplies. The ships that will be built at Zvezda are considered integral to Russia's plans to exploit its oil and gas reserves in the Arctic.

Russia's commercial shipbuilding industry effectively nosedived since the fall of the Soviet Union, with Moscow relying on the major Asian shipbuilding nations—for example, South Korea—to build such vessels. In fact, in 2017, Putin announced that South Korean shipyards would build 15 tankers for Russian companies to transport LNG from the Yamal Peninsula in Siberia. Russian state-owned energy giant Gazprom has been overseeing work on gas extraction and transportation on the Yamal Peninsula.

Given the ambitious expansion plans for Russia's oil and gas industry, it is not surprising that two major state-owned companies—Rosneft and Gazprom—were key members of the consortium that established Zvezda.

In September 2017, Zvezda signed a technology cooperation agreement with South Korea's Hyundai Samho, one of the world's largest commercial shipbuilders, for production of ships. The agreement covered the construction of five oil tankers. The five 'Aframax' tankers, with a displacement of 114,000DWT, would be designed to operate in the icy waters of Baltic and Arctic. The delivery of the

first Aframax tanker to its customer, Sovcomflot, is expected by 2020-21.

Russian companies have increasingly lost their dominance in India's defence market with the entry of suppliers from the US and even South Korea in the past two decades. Zvezda shipyard gives Russia an opportunity to compete in a new and crucial field, one which offers plenty of opportunity given India's insatiable thirst for oil.

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