U.S. Sanctions Chinese Giant For Supporting Blacklisted Russian LNG Project

The United States has imposed sanctions on China-based Zhoushan Wison Offshore and Marine Co. Ltd for supplying power modules to Novatek’s Arctic LNG 2 project, a blacklisted Russian energy initiative.

Per the U.S. State Department, Wison built and supplied power generation modules for Arctic LNG 2’s liquefaction trains.

The company constructed 4 specialised modules similar to those previously delivered to the project by U.S-designated RED BOX ENERGY SERVICES PTE LTD.

These modules were shipped from Wison’s Zhoushan yard to the Arctic LNG 2 site near Murmansk through a series of transfers, involving U.S.-sanctioned ships like Hunter Star and Nan Feng Zhi Xing.

Some vessels hid their identities during the operation.

The sanctions imposed on Wison could have a major impact on its other projects, including the construction of the Nguya LNG floating liquefaction plant for Italy’s Eni, which is set to boost LNG production in the Republic of the Congo by the end of 2025.

U.S. sanctions could complicate payments and operations for this project.

The U.S. also sanctioned Hong Kong Yaqing Shipping Co. Ltd and its heavy-lift ship Ocean 28 for transporting modules from Wison to the Arctic LNG 2 project.

Additional measures targeted Shyhart management and Avision Shipping, operators of LNG carriers that supported the project, including vessels like the Mulan, Onyx and Pravasi.

Rosatom, Russia’s state nuclear corporation, also faced sanctions. These included its CEO Alexey Likhachev and key personnel like Vyacheslav Ruksha, head of the Northern Sea Route Directorate.

The sanctions also restrict Russia’s nuclear-powered icebreaker fleet and Arctic navigation operations.

These measures block the U.S. from dealing with ships and companies linked to Russia’s Arctic oil projects, including the Varandey, Novy Port, and Prirazlomnoye oil fields.

These projects collectively produce about 25 million tonnes of Arctic oil annually.

Sanctioned vessels include Varandey’s shuttle tankers Kapitan Gotsky and Valentin Pikul, as well as Prirazloomnoye’s Kirill Lavrov and Mikhail Ulyanov.

Novy Port’s fleet, comprising vessels like Shturman Albanov and Mikhail Lazarev was also blacklisted.

South Korean shipyards have stopped new constructions for Russia, and maintaining existing ships has become challenging due to restrictions on spare parts from Swiss company ABB.

The Arctic LNG 2 project, operational since 2019, has faced major challenges due to sanctions. Novatek, the project’s majority owner, saw its LNG production drop by over 90% in November 2024.

Foreign investors, including TotalEnergies and Chinese firms CNPC and CNOOC, suspended their involvement in December 2023. Western sanctions have also limited buyers for LNG produced at Arctic LNG 2.

Some modules for its third liquefaction train were sent back to China after delivery issues in the West.

Wison a major player in offshore engineering and module fabrication announced in June 2024 that it would cease operations in Russia and divest its interest in Zhoushan Wison Offshore and Marine. The company regrets the decision now.

Reference: U.S State Department

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