Time has run out for Chinese technology provider Zhoushan Wison Offshore and Marine, a key partner in Novatek’s Yamal LNG and Arctic LNG 2 projects. The company’s brazen scheme to deliver a large power plant from its Zhoushan yard to the Russian Arctic last fall has now garnered the attention of U.S. officials, resulting in sanctions against Wison and several vessel operators.
It was reported on Wison’s efforts and for several months tracked three heavy lift vessels, Ocean 28, Hunter Star, and Nan Feng Zhi Xing, as they struggled through early winter sea ice. With the help of Russian nuclear icebreakers the ships delivered the power plant modules to Arctic LNG 2 by the middle of November 2024.
But Wison is not the only high-profile target of this final sanctions package days before the end of the Biden administration; the U.S .Departments of State and the Treasury went all out. In addition to more than 180 oil and LNG tankers of the so-called shadow fleet, the latest measures target a number of Russian Arctic oil and gas projects and foreign suppliers like Wison.
“Today’s sanctions actions make clear that there is no business as usual with Russia. As long as Putin continues his illegal war against Ukraine, Russia will remain in the penalty box. Its status as a reliable energy supplier is gone and we are marking a new chapter in independence from Russian energy coercion,” Assistant Secretary of State Geoffrey Pyatt.
The latest U.S. measures encompass all of Russia’s existing and planned Arctic oil projects putting the country’s polar ambitions in deep freeze.
Sanctions target the entire fleet of ice-capable oil tankers in service of the Varandey, Novy Port, and Prirazlomnoye oil projects.
For Varandey sanctions block shuttle tankers Kapitan Gotsky, Timofey Guzhenko, Vasily Dinkov and the newly delivered Valentin Pikul. Prirazlomnoye’s shuttle tankers, Kirill Lavrov and Mikhail Ulyanov are now also blocked. For Novy Port seven tankers, Shturman Albanov, Shturman Koshelev, Shturman Malygin, Shturman Ovtsyn, Shturman Shcherbinin, Shturman Skuratov Mikhail Lazarev, are included in the latest sanctions. The three projects account for all of Russia’s Arctic oil production, around 25 million tonnes per year.
The move will further complicate Russia’s ability to find buyers for its Arctic crude. The sanctions also exacerbate Russia’s shortage of ice-capable oil tankers. In light of the expanding sanctions regime, shipyards in South Korea have stepped away from constructing additional vessels for Russia.
Maintaining existing vessels will always become a major challenge for Russia now, especially servicing their Azipod propulsion system provided by Swiss-based ABB.
LNG carriers in service of Yamal LNG already face similar issues. Ice-capable Arc7 LNG tanker Christophe de Margerie, in service since 2017, has been out of commission for more than 6 months as it struggles to procure needed spare parts and services.
The country’s next major Arctic project, Vostok Oil, the largest oil sector development in the world over the last 20 years, now also finds itself directly targeted by the U.S. And so does its owner Gazprom Neft.
Additional sanctions against oil field service providers will also hamper development of the Vostok Oil project.
The U.S. also sanctioned an entire fleet of offshore icebreakers and supply vessels in service of the Sakhalin-I and Sakhalin-II oil and gas project. Sanctions include Aleksey Chirikov, Fedor Ushakov, Gennadiy Nevelskoy, Stepan Makarov, Vitus Bering, Yevgeny Primakov, SCF Endeavour, SCF Endurance, SCF Enterprise, and SCF Sakhalin.
