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Sanctions Force Russia to Cancel $230 Million Icebreaker Project
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Russia has canceled a contract with the Onega Shipbuilding Plant for the construction of two icebreakers, Russian publication Vedomosti reported on August 15. The cancellation was attributed to international sanctions.
The deal, valued at $230 million and signed in 2021, was annulled by the state-owned company Rosmorport on July 10.
The project involved two 95-meter Icebreaker7-class auxiliary vessels with 12–14 MW of power, capable of navigating ice up to 1.5 meters thick. The ships were designed to operate on both diesel fuel and liquefied natural gas, intended for year-round service in the Baltic, White, and Barents seas, as well as summer and autumn operations in the Arctic Ocean, according to Militarnyi.
Originally scheduled for delivery in 2024 at the Great Port of Saint Petersburg, the timeline was later pushed to 2026, but construction never began. The delay is attributed to the sanctions imposed following Russia’s full-scale invasion of Ukraine.
Despite the lack of progress, Rosmorport had advanced the shipyard $115 million, which the company must now return within five business days.
Initially, the Turkish shipyard Kuzey Star Shipyard was set to handle subcontracting, but those arrangements fell through after the war in Ukraine began.
No statement from the shipyard has been reported regarding the cancellation, Militarnyi states.
Earlier, it was reported that Russia’s largest state-owned shipbuilding company, the Vympel Shipyard in Rybinsk, Yaroslavl region in western Russia, has begun laying off staff due to financial difficulties.
The company, which is part of the United Shipbuilding Corporation (USC), Russia’s largest holding for the production of both civilian and military vessels, is facing a significant funding shortfall, reportedly exceeding $12.4 billion, according to the Russian Ministry of Finance, Russian state media RBC reported.
