U.S. Reacts Quickly with More Sanctions Targeting Russia’s Arctic LNG 2

U.S. added two more LNG carriers to the sanctions as it targets Russia's Arctic LNG 2 project

The U.S. appears especially determined to block Russian efforts to launch its LNG operations at the Arctic LNG 2 project. For the second time in two weeks, the U.S. imposed sanctions on vessels just days after they were involved with the export of LNG products.

Analysts believe the U.S. efforts are dramatically impacting Russia’s plans to export LNG from the new facility. Novatek owns 60 percent of the project which was slated to be Russia’s largest LNG operation but the speculation is that the project will be scaled back as the U.S. continues to impose sanctions days after vessels load at the facility.

“The U.S. government will continue to answer attempts to operationalize the sanctioned Arctic LNG 2 project or otherwise expand Russia’s energy capabilities with a swift response,” said Matthew Miller, a spokesperson for the Department of State. “Working alongside our G7 partners and other allies, we will remain steadfast in countering Russia’s exploitation of its energy resources for political gain.”

In the latest round, the U.S. State Department today listed two more LNG carriers and their Indian owners and managers. According to the U.S., the LNG carrier New Energy (85,600 dwt) loaded a cargo less than two weeks ago on August 25, via a ship-to-ship transfer with the carrier Pioneer (77,700 dwt) which the U.S. had sanctioned two days earlier on August 23. State says that the vessel used deceptive practices to hide its actions, including turning off its AIS transmissions.

The New Energy is listed as being owned by Gotik Shipping of India and managed by Plio Energy Cargo Shipping. The U.S. listed both of the companies as well as the New Energy. A second vessel, the Mulan (44,737 dwt) also managed by Plio was also listed.

The Pioneer is also managed by the same Indian company. All three vessels are registered in Palau.

The U.S. took a similar quick action on August 23 when it listed a total of seven LNG carriers as part of a wider, sweeping round of sanctions on Russian interests. Last month’s effort targeted vessels managed from the UAE as well as construction and other companies supplying Arctic LNG 2. U.S. officials said that the project was facing a critical shortage of vessels forcing it to resort to tactics similar to those used with the crude oil exports and that they would continue to enforce restrictions.

The U.S. previously sanctioned Arctic LNG 2 in September 2023. In an effort to cripple the project before it began production, last year the U.S. targeted two LNG floating storage units (FSUs) designed to support the project as well as companies providing engineering services to support the development of the project.