Fincantieri Announces Enhanced Technology Partnership with Russia

During the Italy-Russia Business Forum, being held in Trieste, Fincantieri announced, in the presence of Enrico Letta, Italy's President of the Council of Ministers, and Vladimir Putin, President of the Russian Federation, the signing of an agreement to define plans for a drillship featuring frontline innovation and technology, and the securing of a contract to build a semisubmersible floating platform for the transportation of nuclear submarine reactor compartments.

Fincantieri will work together with the Krylov State Research Centre, one of the world's most prestigious naval research centres, on a project to develop a drill ship able to operate in particularly difficult conditions, in full respect of the environment and crew safety. This highly advanced vessel will be able to navigate in ice up to 1.5 meters thick and ambient temperatures of -40°C and will have a 4-month operational autonomy.

In order to explore types of cooperation in different areas of shipbuilding, in July this year Fincantieri and the Krylov Centre signed a framework agreement spanning several sectors, including the offshore one. Just four months later, the two companies are reaping the first major tangible rewards of this undertaking, in the form of the memorandum signed today.

The agreement is of great importance for two reasons. Firstly, because the steady retreat of artic sea ice will allow access over the medium to long term to vast hydrocarbon reserves, of great interest to the major international oil companies. In fact, in the absence of appropriate technology, low temperatures and the presence of ice have been the major obstacles up until now to accessing these resources.

But there is another aspect, which opens up very important opportunities for Fincantieri in response to ever-growing demand from the oil & gas market (involving the extraction and production of oil and natural gas): in fact, by 2030 Russia plans to buy dozens of vessels like those covered by the agreement, with unit values possibly in excess of USD 1 billion.

Fincantieri has also announced that it has won a contract from RosRAO, the Federal State Unitary Enterprise for radioactive waste management, to build a semi-submersible floating platform for the transportation of nuclear submarine reactor compartments. This platform will be built in the Group's Italian yards for delivery by the end of 2015; at 82 meters long and 27 meters wide, it will have a 3,000 ton displacement. It will be used to transport special material between the storage area and White Sea shipyards facing the Kola Peninsula.

The contract, awarded by RosRAO, follows on from the 2003 cooperation agreement between the Russian and Italian governments for the dismantling of nuclear submarines and the safe management of radioactive waste and spent nuclear fuel, reached within the framework of the G8 Global Partnership, launched at the 2002 summit in Kananaskis (Canada).

The areas of intervention identified by this agreement include several projects, amongst which one for the construction of a multipurpose vessel to transport nuclear fuel and radioactive waste from the decommissioning of Russian nuclear submarines. This vessel, named "Rossita", was delivered at Fincantieri's Muggiano yard in the summer of 2011.

Giuseppe Bono, Fincantieri CEO, commented: "This day is doubly significant for us: not only has the alliance with our Russian friends been strengthened by the placing of a prestigious order, but the agreement signed today with Krylov launches the operational phase of our collaboration with this prestigious research institute. We’re ready to work together to harness the great potential in the oil & gas industry and in the cruise sector, which is looking towards new areas of development." Bono concluded: "As the number one shipbuilder in the world by diversification, our commitment to technological innovation is an imperative, and the agreements we're announcing today denote the importance of what we see as a strategic partnership, from which we're sure other significant opportunities will arise."

Denis V. Manturov Minister of Industry and Trade of the Russian Federation: “I believe that the agreement to be signed today by the Italian Shipbuilding Corporation Fincantieri SpA and our leading branch-wise Research Center, the Krylov Centre, will be prosperous and the cooperation of the two companies will develop”.

Andrey V. Dutov, Director General of the Krylov State Research Centre: “This project is the evidence of high competence of the Krylov Centre in commercial engineering and development of high-end vessels and offshore structures. I hope that the cooperation with our partner, the Italian shipbuilding corporation Fincantieri S.p.A, will be fruitful and result in implementation of joint projects in global shipbuilding market”.