LNG Tanker Buying Spree Sparks Fear of Another Dark Fleet

A marked increase in LNG tanker purchases by companies registered in the UAE has sparked concern that Russia may be building a dark fleet for the liquefied fuel, the Financial Times has reported, citing tanker buying data.

Windward, a risk consultancy cited in the report, found that since the second quarter of last year, companies registered in the United Arab Emirates had bought more than 50 LNG tankers. The FT noted that there was a considerable increase from the occasional LNG tanker purchase deal prior to that year.

The report also quoted data from Kpler, whose risk and compliance unit told the publication that the surge in LNG tanker acquisitions may be pointing “to a complex network of maritime operations potentially linked to Russian interests”. The ship-tracking company said that some of the LNG tankers that changed hands in the past year are currently traversing routes that are commonly used to ship Russian gas to international markets.

Russian LNG was the last energy commodity to become a sanction target for the European Union, not least because of the bloc’s continued—and politically awkward—reliance on that commodity. Indeed, Europe earlier this year was revealed as Russia’s biggest LNG buyer.

Yet this did not prevent the EU from imposing sanctions on Russian LNG in late June, aiming to curb the country’s ability to make money from its liquefied gas. The sanctions involved a ban on re-exporting Russian LNG to third countries via European ports along with a ban on new investments and technology provision for Russian LNG projects.

The sanctions, which were added to U.S. sanctions introduced last year, have started to bite at Novatek’s Arctic LNG 2 project, with foreign partners pulling out and taking their offtake commitments with them. Following this, Novatek had to reduce production at Arctic LNG 2 this year.

By Irina Slav for Oilprice.com

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