Swan Energy’s Pipavav Shipyard and Cochin Shipyard eyes four icebreaker ships for Russia in a Rs 4,000 crore deal

A top-level team from Swan’s shipyard located at Pipavav in Gujarat, comprising its Chief Executive Officer, Rear Admiral Vipin Kumar Saxena, (IN Retd), visited Moscow in early December to discuss the ice breaker shipbuilding order, a government official briefed on the visit said. Describing the three-day trip as “very successful”, the government official said, “Russia wants Pipavav Shipyard and Cochin Shipyard to finalise the order and start as soon as possible”.

An icebreaker ship is used to break ice which makes it easier to melt, becoming water that absorbs more sunlight. Icebreakers play a crucial role in providing response capacity for crises and disasters in ice-covered waters.Russia is pitching the Northern Sea Route as an alternate global shipping lane, offering quicker transit time between Northern Europe and East Asia than the conventional Suez Canal route.

Russia’s keenness to build four ice breaker ships in India has been bolstered by the return of President elect Donald Trump to the White House. “You can see Trump openly supporting Russia and vice versa with Putin. The Russians are very gung-ho about Trump taking over as President of the United States of America in mid-January when things are expected to fall in place,” the official said.

Russia is enticing Indian yards to build the ice breaker ships for ROSATOM, holding out a promise to order big ships later, he said. “Russia wants to do everything with us; you take big bulkers, tankers and container ships especially with shipbuilding being given a thrust by the government. And, Prime Minister Narendra Modi and Russian President Putin are syncing well,” the official said. “The two sides are expected to finalise a memorandum of understanding detailing the timeline, cost, infrastructure and transfer of technology for building the ice breaker ships in 2-3 months,” the official said. As the special steel required to build the hull of an ice breaker ship is not available in India, it will have to be sourced China. “Russia will get the special steel for making the hull from China which will then be sent to India,” the official said.

Pipavav shipyard, which boasts of one of the world’s largest dry docks, currently also has slots to offer customers – a key factor in the current shipbuilding market – unlike other yards in China, South Korea and Japan which are fully booked till at least 2028. Hazel Infra Ltd, a special purpose vehicle 74 percent owned by Swan Energy Ltd and 26 percent by Hazel Mercantile Ltd, acquired the bankrupt shipyard at Pipavav under the Insolvency and Bankruptcy Code (IBC).

Swan Energy did not respond to a mail seeking comment. Cochin Shipyard declined to comment. The ice breaker ships order will help Russia utilise some of the money lying with India for the crude oil supplied to Indian refiners given the restrictions imposed on dollar transactions involving Moscow.

According to the Russian Government’s Northern Sea Route Development Plan, the country aims to transport at least 150 million tonnes of crude oil, liquefied natural gas, coal, and other cargoes a year, starting 2030, via its Northern Sea Route. The Development Plan includes more than 50 icebreakers and ice-class vessels, along with construction of ports, terminals and emergency vessels.

Russia and India are discussing the possibility of systematic supplies of Russian energy resources (oil, coal, and LNG) from the north-western ports of Russia via the NSR to Indian ports with transshipment in Russian Far Eastern ports.