Russia Begins Ship-To-Ship LNG Transfers Ahead of European Union’s Ban on Transhipments

LNG Transhipments have begun in the Russian Arctic, off the Kildin Island near Murmansk. It started a month earlier this year, compared to the previous years. Kildin anchorage lies in the eastern Barents Sea off the coast of the Kola Peninsula.

Energy Giant Novatek uses ship-to-ship transfers of LNG to maximise the use of its ice-capable ships fleet. Western sanctions have rendered two floating LNG storage tanks of its logistical network unusable.

Chinese Wen Cheng and Arc7 ice-class vessel Nikolay Urvantsev are part of the first ship-to-ship transfer of the 2024-2025 winters. Usually, transfers take 48 hours.

Open Ocean LNG transfers will become more important in the coming year as the European Union’s transhipment bans will enter into force in March 2025. Presently, European Terminals re-export around 20% of the Russian LNG produced by the Yamal Plant.

Kildin anchorage might see over 55 reloadings in the coming year as Moscow intends to transfer a significant volume via ship-to-ship transfers. Around 20 transfers occur at the site throughout the year, mostly in winter when conventional LNG vessels cannot reach Yamal LNG.

Previously, Novatek had a transhipment place in protected Norwegian Seas near Nordkapp but between 2018 to 2020, it shifted a few shipments near Honningsvåg and in August 2020, it moved to Russian waters off the Kildin Island.

It happened due to increasing Western pressure as the U.S criticised Norway for allowing Russian natural gas transit through its waters, which undermined Europe’s energy diversification efforts.

Also, Novatek’s proposal to employ Saam FSU, the biggest floating LNG barge in the world to ship goods on its way to Europe was met with resistance by U.S. sanctions.

With the exception of some test unloadings with authorised cargo from Arctic LNG 2 this summer, it is mainly underutilised and limited to only LNG products from the Yamal Plant.

References: Maritime Gateway

Source: Maritime Shipping News