Sanctioned Russian LNG vessel arrives at Chinese port: CAS

A sanctioned Russian LNG carrier has moored at the port of Beihai in southern China after having called at Kamchatka in Russia's Far East, which is used for the shipment of Arctic LNG 2 cargoes, according to S&P Global Commodities at Sea data.

The 78,204 cu m Arctic Mulan reached the Chinese port with a cargo early Aug. 28, according to CAS. The mooring follows a late-May calling at the east Russian port of Petropavlovsk-Kamchatsky on the Kamchatka Peninsula.

Kamchatka is also the site of the 360,000 cu m Koryak floating storage unit, which serves as an LNG transshipment hub.

Some of the first cargoes loaded at the sanctioned Arctic LNG 2 facility in northern Russia in August 2024 ended up at Koryak or the Saam FSU in Murmansk.

It remains unconfirmed if the sanctioned vessel has discharged LNG from Arctic LNG 2 at Beihai.

Nevertheless, the mooring poses risks. The tanker is on the US Office of Foreign Assets Control's Specially Designated Nationals list.

"Trading with any entity on the SDN list exposes the counterparty to further financial and legal restrictions by the US, and raises other concerns of reputational damage," S&P Global Energy principal analyst Eric Yep said.

"It is likely that the port, LNG terminal, the terminal operator, and offtakers of LNG from Arctic Mulan come under additional scrutiny and a high level of risk assessment by counterparties. Risk and compliance departments at companies currently shipping LNG cargoes to the Beihai terminal are likely working overtime to assess their exposure."

The timing of the mooring, moreover, is "notable," Yep said.

The arrival, he highlighted, comes shortly after the Aug. 15 Alaska meeting between US President Donald Trump and Russian President Vladimir Putin.

"China's downstream gas demand is weak and there is no shortage of available LNG supply, so this extra supply wasn't really needed," he said.

Separately, one of the expanding group of LNG carriers under international sanctions that were recently seen at Arctic LNG 2 has reached Russia's Far East and anchored near the Koryak FSU, CAS data showed Aug. 22.

The Arctic Mulan's owner, Zinnia International, and operator, Skyhart Management Services, could not be reached for comment.

Sanctions

The US imposed sanctions on the Arctic Mulan in September 2024, when the vessel used to go by the name 'the Mulan,' according to OFAC. The Palau-flagged vessel was then reflagged to Russia. It was built in 2024, CAS data showed.

The Koryak and Saam FSU facilities were developed by Arctic Transshipment, a subsidiary of Russia's Novatek, to allow for LNG to be transferred from ice-class tankers to conventional ones for onward shipment. The US imposed sanctions on Arctic Transshipment in September 2023, with Washington saying the company's two FSUs could create "strategic Northern Sea Route transshipment points for Russia's Arctic LNG 2 project."

Novatek holds a 60% stake in Arctic LNG 2, alongside France's TotalEnergies (10%), China's CNPC (10%), China's CNOOC (10%), and Japan Arctic LNG (10%).

Japan Arctic LNG BV, or J-Arc, is a Dutch corporation 75% owned by Japan Organization for Metals and Energy Security, or JOGMEC, and 25% by Mitsui.

Russian projects

The Arctic LNG 2 facility is designed to have three trains, each with a capacity of 6.6 million mt/year, giving it a total capacity of 19.8 million mt/year.

The third train is not expected to come online before 2028.

Russia is also home to the 17.4 million mt/year Yamal LNG facility, also in northern Russia, as well as the Gazprom-operated Sakhalin LNG plant.

Russia also has two other smaller LNG production facilities -- Portovaya LNG and Vysotsk LNG -- but US sanctions were imposed against the two projects with effect from February.

The Arctic Mulan's mooring comes as spot LNG prices hover near recent lows. The Platts JKM benchmark price for spot deliveries to Northeast Asia was assessed at $11.001/MMBtu Aug. 28, down 4.35% day over day.