Obscure entities in Dubai, unknown insurers, new market entrants – many indicators point to Moscow’s creation of a new shadow liquefied natural gas (LNG) fleet following the latest EU sanctions on Russian shipping of LNG.
According to a Bloomberg investigation, ownership of at least eight vessels has been transferred to unknown companies in Dubai, United Arab Emirates, citing global shipping database Equasis; moreover, among them were four ice-class ships that have already received Moscow’s approval to traverse Russia’s Arctic waters this summer.
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At least three of them also have their insurers listed as “unknown”, he reported, citing the International Maritime Organization’s database – a classic feature of shadow fleets used by authoritarian regimes to evade sanctions. .
While the publication said it could not trace the ships directly to Russian entities, they bear all the hallmarks and characteristics of Russia’s shadow fleet.
“In the tight LNG industry, several times smaller than the oil market, it is highly unusual for an unknown name to buy specialized carriers that can cost hundreds of millions of dollars,” Bloomberg reports.
Disputed ships and ownership
Four of the vessels – Asya Energy, Pioneer, New Energy and Mulan – belong to a company unknown to the industry called Nur Global Shipping which is said to have entered the energy sector in 2022. Two of its vessel insurers were listed as “unknown”.
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Ownership of the recently built Ice-class ships – North Air, North Mountain, North Sky and North Way – was transferred to a Dubai-based company called White Fox Ship Management without an official office.
While Russia has used a shadow fleet to evade G7 oil sanctions, shipping LNG requires more technically skilled crews and more complex technology — which Bloomberg said made them easier to track since they number less than one tenth of 7,500 oil tankers worldwide.
Avoidance of sanctions
Russia, the world’s fourth-largest LNG exporter, is likely to race ahead to find alternative routes for the lucrative gas that continues to fund its war machine in Ukraine after the EU’s 14th package of sanctions .
In particular, the latest sanctions include a ban on Russian LNG shipping services to the EU for third country shipments.
Transshipment is a process in which cargo – or LNG in this case – moves between ships during its journey to its final destination.
While transferring LNG offshore has been much more difficult than oil, Malte Humpert, founder of the DC-based Arctic Institute, told Bloomberg that such operations “have been going on at the Kildin anchorage north of Murmansk for years “, referring to the Russian port in the Arctic Circle – which may explain the licenses needed to traverse Russia’s Arctic waters.
Agathe Demarais, a senior fellow at the European Council on Foreign Relations, likens the Western sanctions to a game of punt on rumors of Russia’s new shadow LNG fleet.
“It is no surprise that Russia is using the construction of a shadow LNG fleet, just as it assembled a shadow oil fleet to circumvent the G7 and EU price cap on Russian oil exports,” Demarais said.
“Moscow’s willingness to assemble shadow fleets serves to illustrate the fact that sanctions are a game of whack-a-mole – once a sanctions-avoidance network is set up, Western authorities will target it and then it will be replaced by another in an endless game. of cat and mouse.”
While Russia’s move to evade the G7 price cap has proven to be somewhat successful, the West will likely need to step up its game to effectively implement the sanctions and ensure they have an impact. aimed at the Russian economy.