Final Chinese Module Arrives at Russian Arctic LNG 2 Plant, As U.S. Snoozes on Sanctions Action

By Malte Humpert (gCaptain) –

China has successfully completed a two-month-long shipping operation to deliver a 650 MW power plant to the Russian Arctic. The final heavy lift vessel, Hunter Star, called at the Arctic LNG 2 project after a challenging late-season voyage across thousands of miles of sea ice. 

Three heavy lift vessels, Ocean 28, Nan Feng Zhi Xing, and Hunter Star, departed from ports in eastern China throughout September. They carried power plant modules constructed at Wison New Energies’ Zhoushan yard. 

Industry insiders expressed surprise that the U.S. failed to stop the vessels. 

“It’s a fact that hardliner Assistant Secretary Pyatt has seemingly exempted Wison New Energies from his stated goal to “kill Arctic LNG 2” and any sanctions actions. That is concerning,” one analyst told gCaptain. 

The U.S. State Department had announced a new round of sanctions last week, but did not include Wison. Focus appears to have shifted to interdicting the transport of LNG from Arctic LNG 2, rather than stopping the continued construction of the facility. According to reports Novatek plans to re-start assembly of Train 3 in January 2025 and has begun to re-hire workers for its Belokamenka construction yard.

Wison has been Novatek’s key ally in completing the flagship liquefied natural gas project. The company constructed more modules for the plant than any other Chinese yard. In total it completed 17 out of 33 modules for Arctic LNG 2 weighing between 5,000 and 25,000 tons with construction contracts valued at several billion USD. Four modules remain undelivered at its Zhoushan yard, with a further two aboard heavy lift vessel Wei Xiao Tian Shi near Harbin island in southern China. 

The company recently announced a pivot away from Russia and has made inroads in cooperating with U.S. and European firms, including with companies Baker Hughes, Chart, and Eni. During an investor call earlier this year Chart listed Wison as a customer. 

Asked about its cooperation with Wison and the company’s apparent delivery of modules to Russia, an Eni spokesperson told gCaptain that “Eni fully complies with the international sanctions regime; our activities with Wison are not affected by any kind of international restriction.”

“Wison’s increasing interconnectedness with Western markets appears to have shielded it from facing any consequences for its apparent sanctions violation,” an LNG market analyst concluded. 

In contrast, smaller yards, like Penglai Jutal Offshore Engineering Heavy Industries Co. (PJOE) were unable to escape U.S. sanctions earlier this year. PJOE was sanctioned for its “involvement in the manufacture and shipment of highly specialized LNG modules specifically designed for the Arctic LNG 2 project in Russia.”

The delivery of Wison’s power plant solves the plant’s power supply issue. Novatek intends to commission Train 2 as early as December and start-up production will be used for cool-down of internal storage tanks. Train 1 was commissioned in similar fashion at the end of December 2023. 

The first delivery of supercooled gas from Train 2 will likely have to wait until summer 2025 due to a shortage of ice-capable LNG carriers.

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