Four LNG Tankers Depart US-Sanctioned Russian Arctic LNG 2 Plant For Asia

Russia’s sanctioned Arctic LNG 2 project has resumed shipments after months of inactivity, with several tankers now sailing toward Asia.

According to vessel-tracking data compiled by Bloomberg, at least four tankers loaded with liquefied natural gas (LNG) have recently left the Arctic LNG 2 export facility on the Gydan Peninsula, operated by Russian energy firm Novatek PJSC.

Two of these vessels, the Iris and the Voskhod, both blacklisted by the United States, set out for North Asia via the Northern Sea Route on August 15, following weeks of idling. Two other tankers also departed from the facility last week.

Arctic LNG 2 is seen as Russia’s flagship LNG project and part of Moscow’s plan to triple LNG exports by 2030 after pipeline gas sales to Europe collapsed.

However, the project has been under heavy US and EU sanctions since 2023, when the Biden administration blacklisted it. Those restrictions, combined with uncertainty among buyers, stalled the start-up of the facility and effectively froze exports.

Last year, the plant managed to ship LNG from its Arctic terminal, but instead of reaching end customers, cargoes were transferred to floating storage units in Russian and European waters as buyers avoided the sanctioned supply.

In October 2023, operations were forced to shut down altogether as winter ice conditions returned and no buyers placed orders. The plant restarted loading again in June 2024, but no cargoes have so far been delivered to an import terminal.

Russia has already faced challenges in finding buyers for its Arctic LNG. In one instance last August, a sanctioned LNG carrier loaded cargo from the project and then spent four months sailing around northern Europe, the Mediterranean, the Suez Canal, the Indian Ocean, and the Chinese coastline before moving north to Russia’s Far East, without securing a single buyer.

To keep exports moving, Russia has built a “shadow fleet” of about a dozen LNG tankers. Some are designed for icy waters, while others have repeatedly switched management to hide ownership and avoid sanctions.

Energy analysts say that Asian buyers, particularly in China and India, could be tempted by discounted Russian LNG cargoes. However, the threat of secondary US sanctions continues to discourage many potential customers.

References: Bloomberg, WION

Source: Maritime Shipping News