Russia has started shipping LNG from its flagship Arctic LNG 2 project—but not to customers.
The shipments have been made from the Arctic project to floating storage units either in Russia or in European waters, as potential customers are unwilling to buy LNG from the facility, which has seen tightened Western sanctions in the past months, the Financial Times reported on Thursday, citing data from ship-tracking providers.
Located in the Gydan Peninsula in the Arctic, Arctic LNG 2 was considered key to Russia’s efforts to boost its global LNG market share from 8% to 20% by 2030-2035.
But the project has come under intensifying sanctions from the United States, which have put off any buyers that were previously considering buying cargoes from Arctic LNG 2.
The project has already seen months of delays after the initial U.S. sanctions in November 2023 upended the company’s plans for production start-up and export timelines.
Russia, however, has started to amass a dark fleet of tankers to ship its LNG in vessel ownership transfers similar to the moves that Moscow began after the invasion of Ukraine to create a shadow fleet to export oil and products in the face of Western sanctions.
Some tankers have recently departed from the sanctioned terminal in northern Russia, signaling Moscow’s continued efforts to circumvent Western restrictions.
Last month, the U.S. State Department intensified efforts to derail Russia’s Arctic LNG 2 exports by targeting companies involved in the development of the project and vessels found to have loaded LNG from the facility.
The U.S. State Department in August said it had “taken new steps to sanction entities supporting the development of Russia’s Arctic LNG 2 and other future energy projects.”
The Department designated multiple companies related to the Arctic LNG 2 project to further disrupt the project’s ability to produce and export LNG, as well as the project’s ability to procure critical LNG carriers. These designations include entities involved in the illicit loading of LNG from Arctic LNG 2 in early August.
Three vessels – Pioneer, Asya Energy, and Everest Energy – are LNG carriers targeted by the new sanctions, as well as their registered owners Zara Shiphoding and Ocean Speedstar Solutions.
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By Tsvetana Paraskova for Oilprice.com
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