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FILE PHOTO: The ice-breaking LNG carrier Christophe de Margerie at the Yamal LNG terminal in Sabetta, Russia. Photo: SCF Group

Hanwha Ocean Gas Carrier for Russia’s Arctic LNG 2 Transferred to UAE Entity, Records Show

Malte Humpert
Total Views: 3825
February 9, 2024

Russian natural gas company Novatek takes a key step toward beginning shipments from its Arctic LNG 2 project. 

Ship registry records suggest that ownership of the ice-capable Arc7 LNG carrier Pyotr Kapitsa was transferred to an entity out of the United Arab Emirates on February 1, 2024. The vessel was constructed by South Korean yard Hanwha Ocean, formerly DSME.

“The transfer of the first tanker to a UAE-domiciled entity indicates that a presumed March start to full commercial operations might be feasible,” explains Viktor Katona, senior analyst at Kpler, a data and analytics firm for commodity markets. 

The delivery of ice-capable LNG carriers needed to lift cargo from the liquefied natural gas facility has been hampered by US economic sanctions

US Sanctions Halt Delivery of New Vessels for Russia’s Arctic LNG 2

Pyotr Kapitsa was originally part of a three-ship order by Russian Sovcomflot. The contract was terminated due to sanction-related payment issues in 2022, but Hanwha completed all three vessels and was reportedly looking for a buyer. 

Update (March 4, 2024): In emailed comments Hanwha stated that Pyotr Kapitsa’s ownership had not changed throughout her construction to date and the company rejected as false reporting by S&P Global’s IHS Markit that ownership had changed to New Transshipment FZE.

Ownership of the other two vessels, Lev Landau and Zhores Alferov, currently remains with Hanwha records show. 

“Novatek will certainly do everything in its power to exploit these tankers, which can only be used for Arctic LNG 2, as they are too expensive to operate in open waters, even for Sakhalin,” confirms Hervé Baudu, Arctic shipping expert and Chief Professor of Maritime Education at the French Maritime Academy (ENSM). 

Baudu called the transfer of Pyotr Kapitsa a “Russian magic trick.” 

“Buying the ship indirectly via a company in the UAE. The shipping world is like that. All that remains is to find a qualified crew,” he concluded. 

Shipping database Equasis lists New Transshipment FZE out of Dubai, UAE as the new registered owner and manager. The US blocked a similarly-named Russian company, Arctic Transshipment LLC, in September 2023 – an example that tackling sanctions evasion often resembles a game of whack-a-mole. 

According to online records New Transshipment FZE “operates as a holding company and investment vehicle for projects, partnerships and joint ventures in the area of marine transportation, storage and logistics, including development of marine transportation solutions for LNG […] and transshipment and storage services for LNG.” 

Novatek has relied on entities in the UAE to circumvent sanctions in the past. In 2023 it partnered with Green Energy Solutions LLC out of Abu Dhabi to procure sanctioned western technology. The entity was subsequently blocked by the US in September 2023.

Industry insiders recently speculated that Novatek may be using existing vessels from its Yamal LNG fleet to lift cargo from Arctic LNG 2. However, this prospect has thus far not materialized.

“Yamal LNG stakeholders have been vocal about not using the YLNG-dedicated fleet for Arctic LNG 2 so the shipping issue has been at the forefront of Novatek’s headwinds in carrying out the first ever loading,” highlights Katona. 

Earlier this week industry reporting highlighted the challenges Japan’s Mitsui OSK Lines Ltd. faces. Due to sanctions it has been unable to put into operation its own three Arc7 LNG carriers to service Arctic LNG 2. The company is reportedly working with Japanese and US officials to find a solution, including identifying a buyer to offload the vessels. 

As for Pyotr Kapitsa, the vessel currently remains in Hanwha’s shipyard on Geoje Island.

“The only question is – when will it be ‘delivered’ and sail away from the yard to Russian waters,” concludes Ben Seligman, a project specialist for Arctic oil and gas development.

Update (Feb. 21, 2024): The change of registered ownership was reversed on February 14, 2023 “due to unforeseen circumstances” and Hanwha Ocean Co Ltd was re-designated as registered owner as reported to gCaptain by S&P Global.

Malte Humpert is a Senior Fellow and Founder of The Arctic Institute. His research focuses on Arctic geopolitics, Northern Sea Route shipping and shipping scenarios, and China’s political and economic interests in the region.

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