GTT ceases its activities in Russia, financial impact mainly from 2023

Posted Jan 2, 2023, 6:54 PM

PARIS (Agefi-Dow Jones)–The manufacturer of cryogenic membranes for the transport of liquefied natural gas Gaztransport et Technigaz (GTT) announced on Monday that it is ceasing its activities in Russia, which will have a “financial impact mainly from fiscal year 2023”.

This decision follows an in-depth analysis of the eighth and ninth sets of European sanctions prohibiting in particular engineering services for the benefit of Russian companies, the group explained in a press release. These sets of sanctions were adopted by the European Union last October and December.

GTT added that its order book would no longer include projects in Russia in the future and that its annual objectives would exclude the turnover and the Ebitda which would be generated by the last services in progress in this country.

GTT was engaged in Russia in the design of the tanks of 15 ice-breaking LNG carriers under construction by the Zvezda Shipbuilding Complex (Zvezda) shipyard, as well as in the design of the tanks of three submarine tanks (or GBS) for the company Saren BV, a joint venture between Saipem and Rönesans.

“As of October 1, 2022, revenue of 74 million euros remained to be recognized for ice-breaking LNG carriers by 2025 and 12 million euros for GBS by 2027, i.e. an exposure representing, in total, less than 6% of the order book”, announced GTT in a press release.

In detail, the group indicated that the contract with the Zvezda shipyard would be suspended as of January 8. GTT specified that its interventions would then be limited, on the two most advanced LNG carriers, to “ensuring the safety of the projects and the integrity of the technology, in compliance with the international sanctions in force”.

With regard to the underwater tank projects with Saren, GTT indicated that “the starting conditions” were “being finalized”.

At the same time, GTT also recalled that other orders were in progress with Asian shipyards. They relate to six icebreaker LNG carriers and two floating liquefied natural gas (or FSU) storage units and are specifically intended for Russian Arctic projects. “To date, these projects are continuing normally”, explained GTT, specifying that on October 1, these orders represented a total turnover for the group of 31 million euros to be recognized by 2024.

Finally, “eight conventional LNG carriers ordered by international shipowners, under construction in Asian shipyards, are also intended for Russian Arctic projects, but can operate in all types of conditions”, added GTT.

-Vincent Alsuar, Agefi-Dow Jones; +33 (0)1 41 27 47 39; ed: FXS

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January 02, 2023 12:54 ET (17:54 GMT)

GTT ceases its activities in Russia, financial impact mainly from 2023