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“Russia’s magic trick”: gas carriers from South Korea will enter Arctic LNG 2 via the UAE

Greater Middle East (bbabo.net), - In 2022, the South Korean shipyard terminated contracts with Sovcomflot for the construction of three ice-class gas carriers for the second Arctic LNG project in Russia. But the ships were completed. The owner of the first of them was a little-known company from the UAE, through which the LNG tanker may soon end up in a sanctioned project.

The tanker Pyotr Kapitsa, which the Hanwha Ocean shipyard (formerly DSME) originally built for Sovcomflot, has found an owner from the UAE. As gCaptain writes with reference to ship registers, on February 1, New Transshipment FZE, registered in the UAE, became the owner. Two more gas carriers, Lev Landau and Zhores Alferov, remain with Hanwha Ocean.

Novatek will do everything to use these tankers. The vessels are only suitable for Arctic LNG 2, as they are too expensive for transportation on open water,” Hervé Baudou from the French Maritime Academy (ENSM) told the publication. He considers what is happening to be “Russia’s magic trick”: “Buy a ship through a company in the UAE. The ship market is like this. All that remains is to find a qualified team.”

gCaptain noted that Novatek has already used the UAE to obtain technology bypassing sanctions. For this, in September the US Treasury imposed sanctions on Green Energy Solutions LLC.

For now, the gas carrier Pyotr Kapitsa continues to remain at the South Korean shipyard.

“The only question is when will it be delivered and go to Russian waters,” said Ben Seligman of Arctic oil and gas development.

Earlier, the president of the Japanese MOL, which also ordered three ice-class LNG tankers from Hanwha Ocean for Arctic LNG 2, complained to Bloomberg that it is now impossible to charter gas carriers to the project due to sanctions, but it is also difficult to sell them.

In May 2022, South Korea's Hanwha Ocean announced that it had terminated a contract for the construction of three Arctic-class LNG carriers Arc7 for one of the European shipowners. The reason for termination was that payment for the construction of one tanker worth more than $280 million was not made on time.

Prior to this, the US and EU imposed sanctions on the supply of LNG equipment and technologies to Russia. And in November 2023, there will be direct restrictions on Arctic LNG 2.

Deputy Prime Minister Alexander Novak stated that Arctic LNG 2 could be launched in February. However, the project does not yet have a single tanker, which are also being built at the Russian Zvezda shipyard. Experts discussed the possibility of attracting gas carriers from the first project, Yamal LNG. However, it is served by gas carriers of foreign owners, except for one. And foreign participants in the project may be against it.

As bbabo.net reported, in November last year the United States imposed sanctions against Arctic LNG 2, the capacity of three stages of which will be 19.8 million tons (about 27 billion cubic meters). Next, Reuters reported that Novatek sent some clients a message about force majeure under LNG supply contracts, and Kommersant - foreign participants in the Arctic project reported force majeure on their participation. Information also appeared in the media that Chinese and Japanese companies will turn to the United States for an exception to sanctions. France's TotalEnergies said it would not withdraw its volumes due to force majeure.

Experts have suggested that volumes from the first stage of Arctic LNG 2 will have to be sold on the spot market, and the launch of the next two stages may be delayed. But this is not critical, they say.

“Russia’s magic trick”: gas carriers from South Korea will enter Arctic LNG 2 via the UAE