US sanctions two more LNG carriers, two shipping companies for Russia trade

The US has imposed sanctions on two more LNG carriers and two related shipping companies associated with Russia's Arctic LNG export project, the US Treasury Department's Office of Foreign Assets Control said Sept. 5.

The two LNG carriers added to OFAC's Specially Designated Nationals list are Mulan and New Energy, while the two shipping entities are Gotik Shipping Co., with offices in India and Liberia; and Plio Energy Cargo Shipping, based in India, according to the statement.

OFAC said the LNG carrier Mulan is linked to Plio Energy Cargo Shipping, while New Energy is linked to Gotik Shipping. The Treasury Department said both companies are connected to attempts to export LNG from the Arctic LNG 2 project, a US-sanctioned facility owned and operated by Novatek with a capacity of 19.8 million metric tons per year.

The sanctions announced by the US Sept. 5 marked the second round of restrictions imposed in less than a month tied to the so-called “shadow fleet” of LNG tankers Russia is said to have amassed to avoid detection and evade Western sanctions already in place. Washington has sought to stymie Russian LNG exports in response to Russia’s war against Ukraine.

“The US 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,” US State Department spokesperson Matthew Miller said in a statement. “Working alongside our G7 partners and other allies, we will remain steadfast in countering Russia’s exploitation of its energy resources for political gain.”

OFAC also issued a general license allowing Plio Energy Cargo Shipping and Gotik Shipping to conduct their transactions through Nov. 6, provided that any payments are made into a blocked account in accordance with its Russian sanctions rules.

A general license is typically issued to allow entities engaged in transactions with a sanctioned entity to wind down ongoing business due to concerns around issues such as the safety of crew, maintenance of ships and environmental regulations.

However, the general license does not allow entry into any new commercial contracts, offloading of any cargo onboard any of the blocked ships, including Russian-origin LNG, except for urgent situations like safety, and does not allow any transactions related to the sale of Russian LNG, OFAC said.

The 78,204-cu-m Mulan is a new ship built in China that started operations earlier this year, according to data from S&P Global Commodities At Sea. It is currently sailing near Spain's Huelva Anchorage and previously called at India's Cochin LNG terminal and Singapore's anchorage for bunkering, the data showed. Its capacity is smaller than normal LNG carriers and is not currently carrying any LNG cargo, according to the data.

The 146,838-cu-m New Energy is a 2007-built LNG carrier and is one of the ships that has been switching off its signals so that it cannot be tracked. It is suspected of being engaged in Russian trade and conducting ship-to-ship transfers of cargo at sea.

Russian LNG

The latest announcement comes after the US on Aug. 23 issued a wide swathe of sanctions on Russia-related entities, including seven LNG carriers -- the Palau-flagged Asya Energy, Everest Energy and Pioneer; and the Panama-flagged North Air, North Mountain, North Sky and North Way.

One of the ships, the Everest Energy, appeared to have docked at the Arctic LNG 2 plant in preparation for what could be the latest shipment from the Novatek-operated project, CAS data showed Sept. 6.

Pioneer and Asya Energy were recently acquired by the India-based Ocean Speedstar Solutions, OFAC said, with the company added to the sanctions list along with Zara Shipholding, the registered owner of Pioneer.

"In an attempt to circumvent US sanctions on, and revitalize, Russia's Arctic LNG 2 project, Russian companies have engaged in efforts to procure secondhand LNG tankers, predominantly through front companies in third country jurisdictions, to make up for a critical shortage of available tankers for the Arctic LNG 2 project," OFAC said in August.

It said Pioneer and Asya Energy entered Russian territorial waters in late July 2024 and proceeded to engage in a number of deceptive shipping practices, such as shutting off the ships' automatic identification system (AIS), as well as manipulating the ships' AIS to broadcast false locations.

The OFAC statement said Mulan and New Energy are also Palau-flagged, but in late August, trade media reported that the Republic of Palau had temporarily suspended the registration of the three LNG carriers sanctioned by the US on Aug. 23.

OFAC also sanctioned UAE-based ship management company White Fox Ship Management that managed the four LNG carriers North Air, North Mountain, North Sky and North Way, which it said transshipped LNG from Russia's Yamal LNG project, despite being originally intended for use with the Arctic LNG 2 project. The North Sky was sanctioned mid-voyage, and it delivered an LNG cargo to PetroChina's Jiangsu Rudong LNG terminal in eastern China on Sept. 1, according to CAS.

It also blacklisted Novatek China Holdings, a China-based company established in August 2023 involved in the implementation of a marketing program for LNG from the Arctic LNG 2 project.