US Expands Sanctions on Entities Involved in Russian Arctic LNG 2

The US State Department is stepping up efforts to derail Russia’s Arctic 2 LNG exports, targeting companies involved in the development of the project and ships that have loaded LNG from the facility.

Located on the Gydan Peninsula in the Arctic, the Arctic LNG 2 project has been seen as key to Russia’s efforts to increase its global LNG market share from 8% to 20% by 2030-2035.

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

The project has already been delayed for months after US sanctions changed the company’s plans to start production and export timelines.

However, Russia has begun amassing a shadow fleet of tankers to ship its LNG in vessel ownership transfers similar to moves Moscow began after its invasion of Ukraine to create a shadow fleet to export oil and products to the face of Western sanctions.

Some oil tankers have recently left the sanctioned terminal in northern Russia, signaling Moscow’s continued efforts to circumvent Western restrictions.

The US State Department recently said it “took new steps to sanction entities that support the development of Russia’s Arctic LNG 2 and other future energy projects.”

The department has designated several 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 acquire critical LNG carriers. These designations include entities involved in the illegal 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 are their registered owners Zara Shiphoding and Ocean Speedstar Solutions.

The Department also designates White Fox Ship Management, a ship management company based in the United Arab Emirates, which manages four LNG carriers that transhipped LNG from Russia’s Yamal LNG project despite originally being intended for use with the Arctic project LNG 2.

In addition, the US has sanctioned 10 companies involved in the ongoing development of pipeline infrastructure for Russia’s Vostok Oil project.

By Charles Kennedy for Oilprice.com

More top reads from Oilprice.com