US adds two LNG carriers to Russian sanctions list

Two liquefied natural gas carriers and the companies behind them have been slapped with sanctions by the US as it moves to block Russia’s efforts to start up exports from its Arctic LNG 2 plant in the face of its war against Ukraine, and prevent the discharge of the project’s first ever cargo to a final customer.

The 20 million tonnes per annum Arctic LNG 2 development, operated by Russia’s leading independent gas producer Novatek, is of major importance to the Russian government, which wants the country to become a major global LNG producer.

It also sanctioned Gotik Energy Shipping, the registered owner of the vessels, and Plio Energy Cargo Shipping, their commercial manager.

The decision was passed just 11 days after an attempt to circumvent existing sanctions against the Arctic LNG 2 development by carrying out a ship-to-ship transfer of LNG from a sanctioned carrier to another vessel that was not sanctioned at the time of operation.

The US Department of State said New Energy used “deceptive shipping practices”, including shutting off its location transponder to load a cargo from the US-sanctioned Arctic LNG 2 project via a ship-to-ship transfer on 25 August 2024.

The cargo was transshipped from the LNG carrier Pioneer, one of seven LNG carriers sanctioned by the US on 23 August.

Pioneer loaded the first ever cargo from Arctic LNG 2’s Train 1 in early August.

This followed a six month delay to the start-up of Train 1, during which Novatek strived to build a ‘shadow fleet’ of LNG carriers to transport gas covertly from the sanctioned development.

The New Energy has remained off near Port Said in Egypt in the eastern Mediterranean with its cargo since the transfer operation.

The State Department said it was sanctioning the Mulan given that Plio Energy also has an interest in this vessel. TradeWinds identified the Mulan as a new addition to Russia’s shadow LNG fleet on 19 August.

The department said both Gotik and Plio Energy were being sanctioned for having supported Arctic LNG 2 which was sanctioned by the US in November 2023.

“The US government will continue to answer attempts to operationalise the sanctioned Arctic LNG 2 project or otherwise expand Russia’s energy capabilities with a swift response,” the Department of State said.

“Working alongside our G7 partners and other allies, we will remain steadfast in countering Russia’s exploitation of its energy resources for political gain.”

Along with the Pioneer, the Asya Energy (ex-Trader IV) and LNG carrier Everest Energy (ex-Metagas Everett) all loaded cargoes at the Arctic LNG 2 plant. All three LNG carriers appeared on the US sanctions list in August.

The Everest Energy has since discharged its cargo into the Saam floating storage unit north of Murmansk. This is one of two supersized floating storage units built and installed by Russia at either end of the Northern Sea Route. Both vessels have also been sanctioned by the US.

Meanwhile, vessel satellite tracking has revealed that the Everest Energy was moving in Ob Bay between the Yamal and Gydan peninsulas in the early morning of 6 September and heading towards the Arctic LNG 2 loading terminal.

Everest Energy is expected to pick up a fourth LNG cargo from the project and transport it to the Saam FSU.

Several rounds of sanctions against Arctic LNG 2 have blocked the delivery of key Chinese modules for the project’s third train, construction of which began last year at Novatek’s specialised shipyard in Belokamenka, near Murmansk.

Postings in a popular Russian social media network earlier this week suggested that Velesstry, a key contractor working at the Belokamenka yard, has started demobilising thousands of workers from the site. However, this could not be verified by Upstream before the time of publishing.

Earlier unconfirmed reports in Russian media said that Novatek had resolved to suspend the full scale construction of Train 3, leaving just essential support personnel at the yard.

Upstream has contacted Novatek and Velesstroy for comment.

Kyiv-based pro-Ukraine activist group Razom We Stand said in a statement: “Blocking the Russian LNG shadow fleet is a powerful demonstration of the effectiveness of strictly enforced sanctions against Arctic LNG 2.

“However, more decisive action is needed to completely halt Russian LNG flows to European and global markets, cutting off a crucial revenue stream for the Kremlin’s war budget.”