Palau Suspends Flags Of Russian LNG Shadow Fleet Ships Under U.S. Sanctions

The Island Country, Palau, has suspended the registration of three LNG carriers in response to recent U.S. sanctions imposed on vessels linked to Russian gas exports.

The U.S Treasury’s Office of Foreign Assets Control sanctioned Asya Energy, Everest Energy and Pioneer on August 23, 2024.

According to a Palau International Ship Registry statement, authorities are investigating whether these vessels violated sanctions by engaging in deceptive practices.

The suspension is imposed to take action against Russia’s shadow fleet of LNG tankers suspected of evading sanctions using tactics similar to those used in crude oil transports.

The sanctioned LNG carriers are linked to Russia’s Arctic LNG 2 project, a major development in the country’s natural gas export infrastructure.

The U.S. sanctions aim to disrupt Russian energy exports after previous ones were imposed on the Arctic-based facility last year.

The vessels under investigation are part of a shadow fleet developed to avoid sanctions through opaque ownership structures, unknown insurers, and practices such as disabling or altering Automatic Identification Systems (AIS) to hide their locations.

Without a flag, these vessels’ movements will be severely restricted, mainly through major canals that require proper documentation and insurance.

According to Precision LNG’s shipping consultant, Richard Pratt, vessel flagging is essential under international maritime law and insurance requirements.

The suspension of these vessels shows the worldwide objections to Russia’s attempts to make its new LNG project operational.

The U.S. State Department’s top energy official, Geoffrey Pyatt, reiterated the U.S. government’s commitment to counter Russian energy projects, stating that any attempts to bring the Arctic LNG 2 project into operation would prompt immediate action from the US government.

Reference: Bloomberg

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