{"id":18681,"date":"2024-05-30T20:58:12","date_gmt":"2024-05-30T17:58:12","guid":{"rendered":"https:\/\/www.liberalglobe.com\/?p=18681"},"modified":"2024-05-30T20:58:12","modified_gmt":"2024-05-30T17:58:12","slug":"novateks-arctic-lng-2-project-russias-plan-to-build-a-shadow-fleet-to-transport-lng","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=18681","title":{"rendered":"Novatek’s Arctic LNG 2 project – Russia’s plan to build a shadow fleet to transport LNG"},"content":{"rendered":"\n

Russia is building a “shadow LNG fleet” to carry natural gas cargoes in the face of Western sanctions, resuming its practice of shipping crude and oil products.<\/p>\n\n\n\n

It should be noted that G7 finance ministers, who met in Italy, declared (25\/5) “determined to increase sanctions” against Russia’s financial and manufacturing sector to “reduce” its revenues, according to a draft of the final communique which AFP received.<\/p>\n\n\n\n

Among the ways considered, the ministers suggest “continuing to target Russia’s energy revenues and its future export potential.” Since the start of the Russian invasion of Ukraine in February 2022, the United States and the European Union have adopted a series of sanctions to try to choke the Russian economy with little success so far.<\/p>\n\n\n\n

The European Union has already imposed 13 sanctions packages against Russia and is now considering targeting Russian liquefied natural gas (LNG) in a new package of sanctions, banning its transit through the EU.<\/p>\n\n\n\n

Novatek’s Arctic LNG 2 project<\/strong><\/p>\n\n\n\n

While current shipping sanctions for transporting Russian LNG have been eased and focus mainly on demand constraints, the US and UK have sanctioned Novatek’s Arctic LNG 2 project, with a total planned capacity of 19.8 million tons\/year.<\/p>\n\n\n\n

The EU is now considering similar measures that could extend the restrictions to include re-exports of existing Russian LNG from its ports. The developers of the Arctic LNG 2 project originally planned to build around 21 LNG Arc7 icebreakers specialized to operate in freezing conditions, but the construction of the 172,600 cubic meter ships was hampered by sanctions and their fate was uncertain.<\/p>\n\n\n\n

Arctic LNG 2, originally scheduled to come on stream in phases between 2023 and 2026, has been unable to start LNG production due to a lack of icebreakers and could turn to existing capacity to meet export requirements, Flex pointed out in its quarterly report.<\/p>\n\n\n\n

Currently, approximately 15 LNG icebreakers serve Novatek’s Yamal LNG project. One possible scenario is that these vessels will also carry cargoes from Arctic LNG 2 in unfrozen waters for transshipment to conventional vessels, which then sail to overseas buyers.<\/p>\n\n\n\n

This would lead to additional demand for LNG carriers, especially if the proposed EU sanctions on Russian LNG are also approved.<\/p>\n\n\n

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The transactions<\/strong><\/p>\n\n\n\n

As activity for old ships with opaque companies has reportedly increased, this could potentially be the start of the LNG shadow fleet as they will have to do more ship-to-ship transfers. Little-known companies based in Vietnam, China and the United Arab Emirates have been buying up old tankers recently, with some deals going for high prices.<\/p>\n\n\n\n

This means that they will be able to absorb some of the pipeline capacity that would otherwise be eliminated.<\/p>\n\n\n\n

Verified transactions<\/strong><\/p>\n\n\n\n

Sales of used tankers have been reported even as Russia has amassed large numbers of oil tankers through offshore companies or in coordination with shell companies \u2014 many based in other countries \u2014 since its February 2022 invasion of Ukraine to circumvent an oil embargo. of the West and the G7 group’s price ceiling, according to market players and government officials, are often called the “shadow”, “gray” or “dark ‘fleet'”.<\/p>\n\n\n\n

A joint study by S&P Global Commodity Insights and S&P Global Market Intelligence (“LNG dark fleet’ could emerge to transfer Russian gas amid sanctions: Flex LNG<\/a>“) found that 591 tankers since April had either been confirmed by Western authorities to have violated sanctions or were at high risk of violating them, representing just over 10% of the global merchant fleet.<\/p>\n\n\n\n

Russia is planning to do something similar to what we have seen in the case of oil and other energy commodities. The Oslo- and New York-listed company’s warning comes as the EU discusses its 14th package of sanctions against Moscow, which may include measures aimed at limiting re-exports of Russian LNG unloaded at EU ports to other markets. It is unclear whether such a measure would target ship-to-ship transfers that could take place in international waters.<\/p>\n\n\n

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Willing buyers<\/strong><\/p>\n\n\n\n

The EU saw purchases of natural gas and LNG from Russia fall from 155 Bcm in 2021 to 80 Bcm in 2022 and to just 43 Bcm last year, according to European Commission data. However, there will be no EU-wide ban on Russian imports for now, as member states should be able to decide how to limit import levels individually.<\/p>\n\n\n\n

Even if the EU were to significantly reduce purchases of Russian LNG, cargoes would be channeled to “willing buyers” in Brazil, India, China and South Africa, resulting in longer sailing distances. This scenario could increase ton-mile demand.<\/p>\n\n\n\n

The charter price for a Tri-Fuel Diesel Electric LNG carrier in the Atlantic is at $36,500\/day and correspondingly the transportation fees of a dual-fuel tanker are at $47,500\/day, on May 23.<\/p>\n\n\n\n

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Russia is building a “shadow LNG fleet” to carry natural gas cargoes in the face of Western sanctions, resuming its practice of shipping crude…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[620,2955],"tags":[5489,3690,5488,58,2405,5487],"class_list":["post-18681","post","type-post","status-publish","format-standard","hentry","category-business","category-energy","tag-arctic-lng-2-project","tag-lng","tag-novatek","tag-russia","tag-sanctions","tag-shadow-fleet"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/18681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18681"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/18681\/revisions"}],"predecessor-version":[{"id":18686,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/18681\/revisions\/18686"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}