US Sanctions Disrupt Delivery Of New Ships To Russian LNG Plant

Takeshi Hashimoto, President of Mitsui OSK Lines Ltd., a Japanese shipping company, claims that US sanctions are seriously hindering the delivery of specialised ships to a new LNG facility in Russia, as reported by Bloomberg. These restrictions make it more difficult for the corporation to sell its three ice-breaker LNG ships since they prevent them from being chartered to the Arctic LNG 2 project. This development threatens the exports essential to Russia’s objectives for LNG.

The Arctic LNG 2 project, operated by Novatek PJSC, one of Russia’s biggest LNG exporters, has been harmed by the sanctions, which were put in place in reaction to Russia’s full-scale invasion of Ukraine. Novatek intended to use the vessels to transport fuel from the platform, which was required to operate at total capacity. However, without them, Novatek has been forced to postpone the facility’s inaugural voyage and has difficulty finding vessel purchasers.

Following the contract terms, Mitsui OSK Lines must sell their vessel to the project if they cannot assist Arctic 2. However, current restrictions preclude them from carrying out this deal, resulting in a problematic scenario. The US and Japanese governments are working with Mitsui OSK Lines, or MOL, to address this. The first of three ice-breaker LNG vessels will be completed later this year.

The consequences of these interruptions go beyond Mitsui OSK Lines. The Arctic LNG 2 project’s global partners, such as Japan’s Mitsui & Co. and France’s TotalEnergies SE, have announced a force majeure on their involvement, highlighting the project’s more significant difficulties.

The sanctions imposed by the US Department of State in November in reaction to Russia’s war effort and other unlawful activities include targeting ARCTIC LNG 2, the Arctic LNG 2 Project operator, and other entities, providing a broader background to the current situation. This move has made things more difficult for the project’s minority investors, such as TotalEnergies in France, and has made the setbacks even more severe.

These problems affect the timely delivery of LNG vessels and raise concerns about Russia’s objectives to enhance LNG shipments, especially given decreased access to European markets due to geopolitical difficulties.

Reference: Bloomberg

US Sanctions Disrupt Delivery Of New Ships To Russian LNG Plant appeared first on Marine Insight – The Maritime Industry Guide

Source: Maritime Shipping News