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. Last Updated: 07/27/2016

Finns to Build Platforms for Gazprom

Leading Finnish shipping group Kvaerner Masa-Yards is throwing its anchors into Russia's northern seas in a $200 million project to build offshore drilling platforms for Russia's gas monopoly Gazprom.

Kvaerner Masa-Yards will build the platforms in the Barents Sea in tandem with an Arkhangelsk naval military factory, Zvezdochka, and plans to expand its Russian operations with more joint projects.

"We have decided to focus principally on the development of the Arctic shell because this area appears to be one of the most promising in Russia and for us," Martin Saarikanagas, president of Kvaerner Masa-Yards, said at the opening of the company's permanent representative office in Moscow.

The Finnish shipbuilding company, which also has an oil and gas division, will build cabins and provide drilling equipment technology for the offshore gas platforms. Saarikanagas did not give any figures for his company's investment, but Zvezdochka officials said each platform would cost 500 billion rubles (about $1 million).

The Barents Sea project marks the first time any Russian naval enterprise has built an offshore gas platform, said Vladimir Nitkin, Zvezdochka's deputy general director.

"Our main goal is to convert our military factory to civil production," Nitkin said. The plant used to build nuclear submarines but has now switched to fix and modernize ships.

Claes Reksten, local director of the joint venture Kvaerner & Zvezdochka, said the Finnish group was forming the venture "to make our Russian partner as attractive as possible to the West and upgrade its credibility ... this project should serve as an example for other foreign oil and gas companies and should make them want to invest in that factory."

Nevertheless, Mikko Niini, vice president of Kvaerner Masa-Yards and the company's main CIS representative, said one of the strategic purposes of opening the Moscow office was to stimulate the sale of Finnish ships in Russia and lobby for oil and gas companies to export their products through the northern seas.

"We are also trying to push ahead the idea that oil and gas companies will export through the north seas ... and so they would buy our ships to do it," he said.

The Finnish group said it had ordered cruise ships, propellers and trailers in a separate deal with Zvezdochka.

Kvaerner Masa-Yards already holds 40 percent of the Vyborgskovo ship-building factory in Vyborg and a 49 percent stake in Murmansk State oil naval transporter factory. It is a division of the Kvaerner a.s. conglomerate, which has operations in America, Europe and Asia and is one of the world's largest shipbuilding companies.