Sanctioned Russian LNG Ship Nears Asia After Arctic Trip

Sanctioned Russian LNG Ship Nears Asia After Arctic Trip

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(Bloomberg) — A Russian liquefied natural gas carrier sanctioned by the US is currently heading to potential buyers in North Asia after sailing thousands of miles through the Arctic Ocean.

Asya Energy passed the southern tip of the Kamchatka Peninsula in Russia’s Far East, carrying a shipment from the Arctic LNG 2 plant. It will be closely watched to see if it will continue sailing to an import terminal in the region, or try to cloak its identity in a bid to protect end-users from US retaliatory measures.

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Washington put restrictions on the ship and facility as part of efforts to stem Russia’s plans to expand natural gas exports and tap funds for its war in Ukraine. While Arctic LNG 2 started shipments in August via vessels with opaque ownership that were hiding their location, characteristics of a shadow fleet that are used to circumvent western restrictions, none have yet docked at another country’s port. 

Executives from Novatek PJSC, the majority owner of Arctic LNG 2, have been traveling around the world to find buyers for the sanctioned LNG, and have pursued multiple deals in China and with other Asian buyers, Bloomberg reported earlier this month. The company’s Chinese unit was sanctioned by the US in August for marketing gas from the project. 

Novatek has denied that the company is involved in creating or managing the shadow fleet, describing such suggestions as “untrue” in a Sept. 10 press release.

The Asya Energy passed the Koryak floating storage unit in Russia on Sunday, the ship data show, which means the LNG shipment likely won’t be offloaded at the facility. Three of Arctic LNG 2’s six cargoes so far have been delivered to Russian storage units, while the others remain on the water.

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Meanwhile, the tanker Pioneer — believed to have loaded Arctic LNG 2’s first cargo in early August, and also sanctioned by the US — has traversed the Red Sea, ship-tracking data compiled by Bloomberg show.

It’s the first observed LNG tanker since January to travel the length of the waterway amid Houthi attacks on Western and Israeli vessels. Ships have instead taken longer journeys around Africa. 

The manually listed destination for Pioneer has recently showed “Not Support Israel,” ship-tracking data show. It hasn’t discharged elsewhere and is now closer to potential buyers in Asia. 

—With assistance from Anna Shiryaevskaya.

(Updates with details on the tanker Pioneer in last three paragraphs.)

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