The US continues to follow through on its efforts to “kill” Russia’s Arctic LNG 2 energy project.
Following rounds of sanctions in September and November 2023, the US Department of the Treasury announced a host of new sanctions targeting a shipyard, specialized Arctic gas carriers, and a key assembly yard.
Novatek, the company behind the project, began producing liquefied natural gas (LNG) at its flagship project in December but has yet to make any shipments.
The new US sanctions aim to restrict the company’s ability to procure Arctic LNG carriers already constructed by a South Korean shipyard and looks to further curtail Russia’s ability to build additional such vessels domestically by sanctioning the Zvezda shipyard.
The shipyard in Russia’s Far East has up to five Arctic icebreaking Arc7 LNG vessels under construction with two or three ships projected to enter into service at some point in 2024. It is unclear how the blocking measures against Zvezda will delay their service entry.
More importantly, the holding companies behind three vessels of the same type built by South Korean shipyard Hanwha Ocean have also been sanctioned.
These measures will further restrict Hanwha’s ability to offload the vessels to new owners or transfer them to Novatek through the use of legal loopholes.
The shipyard has completed four vessels, all of which have undergone sea and gas trials and were projected to start servicing the Arctic LNG 2 project this year.
Novatek and Russian officials originally announced deliveries from the project to begin in January followed by comments suggesting initial shipments won’t occur until March. With the new sanctions further delays now appear likely.
Additional measures target Novatek’s Belokamenka construction yard where massive prefabricated modules arriving from shipyards across China are assembled onto floating platforms.
The yard completed the first train, or production line, during summer 2023 and the floating platform also known as a gravity based system was subsequently towed to Arctic LNG 2’s location on Gydan peninsula in August 2023.
The second production line is nearing completion with the final three modules just days and weeks away from delivery aboard three specialized heavy load vessels.
Two vessels, Red Box’s Audax and Pugnax, battled harsh Arctic ice conditions during their month-long voyage along the Northern Sea Route, each carrying one module the size of a football field. A third module took the long-way around through the Indian Ocean and around Cape of Good Hope.
Shipping operator Red Box has previously been in the media spotlight as highlighted by Le Monde last fall due to its possible skirting of international sanctions.
With the blocking measures against Belokamenka it is unclear if a delivery of the modules by Red Box would represent a direct violation of sanctions.
UK, but no EU sanctions
Mirroring some of the US’ measures, the UK government also sanctioned the Arctic LNG 2 project and affiliated entities, including a number of Novatek directors.
