Chinese State Enterprise Buys Wison's Sanctioned Yard in Zhoushan

The giant Zhoushan Wison yard, now under new ownership and a new name (Wison)

A Chinese state-owned enterprise has taken over the ownership of Zhoushan Wison Offshore Engineering, the Wison Group unit that the Biden Administration sanctioned for supporting Russia's LNG export ambitions on the Arctic coast of Siberia.

According to the U.S. State Department, Wison supplied power generation modules for Novatek's Arctic LNG 2 project, which is heavily sanctioned. The modules were to be installed on Arctic LNG 2's barge-based liquefaction trains. After the modules were completed at Wison's plant, the company allowed them to be shipped to the Arctic LNG 2 construction site via a series of complex transshipment operations, which appeared designed to obscure the movements of the large and expensive project cargo. Two of the vessels involved - Hunter Star and Nan Feng Zhi Xing - have been sanctioned before for chartering activity in Russian energy projects.

After the Treasury announced that Zhoushan Wison would be sanctioned, parent company Wison New Energies pledged to avoid "any new Russian business" and said that it would sell its entire stake in its Zhoushan unit. It emphasized that Wison New Energies would not have any shareholding in the company after the sale.

Less than one month after sanctions on the yard were announced, a new owner has emerged: the state-owned Nantong Economic and Technological Development Zone Holding Group, a subsidiary of Nantong's municipal government. It is a Class I state-owned enterprise, with access to preferential credit terms. (Nantong is a five-hour drive away from Zhoushan, on the other side of Shanghai, but is home to another Wison facility.) The shipyard has been renamed Zhoushan Tongzhou Offshore Engineering.

The sanctions designation was limited to the Zhoushan unit, and Wison is still in the offshore construction industry. It broke ground in early February on a new, unsanctioned shipyard complex called Wison New Energies Qidong Yard. This plant will compete in the same market as the sanctioned Zhoushan yard, and will be a "strategic pillar" for completing the same large-scale EPCIC contracts, like FLNGs, FPSOs and plant modules.