Russia’s energy company Novatek urgently needs more tankers for Arctic LNG 2 — a flagship project hit by US and EU sanctions and critical to Russia’s plans to expand Arctic gas exports.
A media report indicating that Japanese shipowner Mitsui O.S.K. Lines (MOL) and South Korean shipbuilder Hanwha Ocean may be preparing to sell six Arc7 and four Arc4 ice-class LNG tankers to Novatek is deeply alarming.
Such a transaction would immediately help Russia ease the logistical bottlenecks holding back the sanctioned Arctic LNG 2 project.
If MOL and Hanwha proceed, they would be stabbing Ukraine in the back. Such a move would significantly undermine the support provided to Ukraine by the governments and people of Japan and South Korea.
It would also undermine US sanctions. Arctic LNG 2 is clearly sanctioned, Novatek owns 60% of the project, and it is no secret that Novatek urgently needs additional ice-class LNG shipping capacity to make Arctic LNG 2 work.
Routing the transaction through Novatek’s Singapore-based subsidiary, Novatek Gas & Power Asia Pte. Ltd., does not change this reality.
US lawmakers and the Treasury OFAC should take a close look at whether this deal undermines the intent of sanctions against Arctic LNG 2.
Hanwha is also competing for Canada’s multibillion-dollar submarine contract, with a decision expected before the end of June.
Canada should raise the proposed sale directly with Hanwha and urge the company to step back from the deal.
Not a single dollar should be spent on companies whose actions risk enabling Russia’s sanctioned Arctic LNG expansion and could undermine allied sanctions policy.
Last but not least, the deal would seriously weaken the impact of the EU’s recently proposed ban on LNG tanker sales.
Supporters of Ukraine must act to prevent this sale.