EAST ENERGY

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Sanctioned tanker nears Asia after Arctic trip

The 'Asya Energy' sanctioned by the US is currently heading to potential buyers in North Asia after sailing thousands of miles through the Arctic Ocean. The tanker passed the southern tip of the Kamchatka Peninsula, 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. 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. On Sep 10, Novatek has denied that the company was involved in creating or managing the shadow fleet, describing such suggestions as “untrue”. The 'Asya Energy' passed the Koryak floating storage unit in Russia on Sep 29, 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. Meanwhile, the tanker 'Pioneer', which was believed to have loaded Arctic LNG 2’s first cargo in early August, and also sanctioned by the US, has traversed the Red Sea. It was the first observed LNG tanker since January to sail 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 the 'Pioneer' has recently showed “Not Support Israel." It hadn’t discharged elsewhere and was now closer to potential buyers in Asia.

Russia’s LNG shadow fleet grinds to halt following suspension of flag

A week after the Republic of Palau temporarily suspended the flag of three LNG carriers, Russia’s shadow fleet has ground to a halt, for now. Palau’s International Ship Registry pulled the registration of the 'Pioneer', 'Asya Energy', and 'Everest Energy' pending an investigation into their practice of deactivating or spoofing AIS signals while sailing to the sanctioned Arctic LNG 2 project. All shadow fleet vessels have remained idle in Russian or international waters for much of the past week. The 'Pioneer' had loaded cargo in the Russian Arctic on Aug 3 with potential losses approaching 7.5% of cargo a month later. The vessel transferred its cargo during a ship-to-ship to the 'New Energy' north of the Suez Canal. Both vessels have remained idle off the coast of Port Said since the STS. Following its flag being suspended, the 'Asya Energy' turned around in Norwegian waters and sailed for Kola Bay near Murmansk where she has remained since Au 27. Its Moss-type storage system limits losses to 0.15% a day, but they may still be approaching 3-4% more than three weeks after calling at Arctic LNG 2. The 'Everest Energy' headed for the thus far unused world’s largest floating storage barge 'Saam FSU' in the Ura Guba Bay. Transferring its cargo to the modern storage unit could help reduce boil-off rates. The 'North Sky' began offloading its cargo at the Yangkou LNG terminal over the weekend. The vessel loaded cargo from thus-far unsanctioned 'Yamal LNG' nearly four weeks ago but had remained idle off the coast of Yangkou, China for several days. The 'North Sky', together with three other newbuilds from the same order, the 'North Mountain', 'North Air' and 'North Way', was included in sanctions announced last week. While the vessels have not carried product from sanctioned Arctic LNG 2, they were originally intended for use with the project. Potential buyers receiving cargo from the 'North Sky' will likely face the risk of secondary sanctions.

Palau suspended registration of sanctioned tankers with links to Russian gas exports

On Aug 27, 2024, the Republic of Palau has temporarily suspended the registration of the 'Asya Energy', 'Everest Energy' and 'Pioneer', that were recently sanctioned by the US over links to Russian gas exports. The Palau International Ship Registry was investigating whether the vessels violated sanctions through deceptive practices. The LNG carriers were sanctioned by the US Treasury’s Office of Foreign Assets Control on Aug 23. The sanctions imposed on seven LNG carriers linked to Russian gas exports from its newest plant, Arctic LNG 2, have been a fresh blow to Russia as it spent months developing what was believed to be a shadow fleet of tankers for natural gas in a similar way it did for transporting crude oil and products. Such vessels have opaque ownership, unknown insurers and deploy practices such as hiding their location by switching off or manipulating their AIS. The vessel sanctioning is an additional expansion by the US to target Russian energy exports after the US sanctioned the Arctic-based facility late lin 2023. Attempts to operationalize the Arctic LNG 2 project will continue to be met with a swift US government response.