U.S. Blacklists UAE-Based Shipowners for Serving Arctic LNG 2

The U.S. Treasury's Office of Foreign Asset Control has imposed new sanctions on service providers for Novatek's Arctic LNG 2 gas export terminal. This facility has been blacklisted as part of a calibrated effort to constrain Russian energy exports, allowing enough outflow to maintain global price stability while using tailored sanctions to impose limits at the margins. 

The newly-listed firms include Smart Solutions Ltd., a provider of components for the Arctic LNG 2 plant's gravity-based structures - the monolithic concrete bases that Novatek assembled in Murmansk and floated out to the construction site in the Gulf of Ob. Smart Solutions allegedly chartered the Audax and Pugnax, two module carrier vessels that the U.S. has already blacklisted. 

Treasury also sanctioned a Novatek subsidiary in the UAE that the U.S. has linked to Arctic LNG 2's sanctioned operations. According to the Treasury, Novatek's New Transshipment FZE allegedly owns four shadowy LNG carriers that were bought to pick up Arctic LNG 2's banned cargoes. 

The newly-listed UAE firms include New Transshipment and four majority-owned holding companies, LNG Alpha, Beta, Gamma and Delta Shipping. These firms own the LNG carriers North Air, North Mountain, North Way and North Sky, respectively. 

Three sanctioned ships that picked up the first shipments from Arctic LNG 2 have stalled off Russia's Pacific Coast, unable to offload their sanctioned cargoes, according to open source intelligence analysts. Given the severe challenges with finding export routes, Bloomberg reports that Arctic LNG 2 has been forced to shut down production, just months after it started. 

The Yamal LNG plant, located on the opposite side of the Gulf of Ob from Arctic LNG 2, is run by the same operator but is not sanctioned. It continues to export Russian LNG to European buyers at a rate of about 20 million tonnes per year, the same amount as Arctic LNG 2's nameplate capacity.