U.S. Expands Sanctions on Entities Involved in Russia’s Arctic LNG 2

The U.S. State Department is intensifying 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.

Located in the Gydan Peninsula in the Arctic, the Arctic LNG 2 project was considered key to Russia’s efforts to boost its global LNG market share from 8% to 20% by 2030-2035.

But Arctic LNG 2 has been basically on ice since the U.S. imposed in November 2023 fresh sanctions on the Russian project. As a result, foreign shareholders suspended participation in Arctic LNG 2, effectively withdrawing from the financing of the project and for offtake contracts for the new plant.

The project has already seen months of delays after the U.S. sanctions 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.

The U.S. State Department has recently 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 the Arctic LNG 2 project 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.

The Department is also designating White Fox Ship Management, a UAE-based ship management company which manages four LNG carriers that have transshipped LNG from Russia’s Yamal LNG project, despite being originally intended for use with the Arctic LNG 2 project.

Furthermore, the U.S. sanctioned 10 companies involved in the continued development of pipeline infrastructure for Russia’s Vostok Oil project.

By Charles Kennedy for Oilprice.com

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