Russia’s LNG ‘Shadow Fleet’ Grinds to Halt Following Suspension of Flag

By Malte Humpert (gCaptain) –

A week after the Republic of Palau, an island country in the Western Pacific, temporarily suspended the flag of three LNG carriers, Russia’s emerging shadow fleet has ground to a halt, for now. 

Palau’s International Ship Registry pulled the registration of LNGC Pioneer, Asya Energy, and Everest Energy pending an investigation into their practice of deactivating or spoofing AIS signals while traveling to the sanctioned Arctic LNG 2 project. The registry did not immediately respond to requests for comment on how long the investigation would take. 

All shadow fleet vessels have remained idle in Russian or international waters for much of the past week. With Russia’s shadow fleet consisting of older steam turbine vessels, gas burn-off, as high as 0.25% per day, is now becoming an issue. 

Pioneer loaded cargo in the Russian Arctic on August 3 with potential losses approaching 7.5% of cargo a month later. The vessel transferred its cargo during a recent ship-to-ship to the carrier New Energy in the waters north of the Suez Canal. Both vessels have remained idle off the coast of Port Said since the STS.

Following its flag being suspended Asya Energy turned around in Norwegian waters and sailed for Kola Bay near Murmansk where she has remained since August 27. Its Moss-type storage system limits losses to 0.15% a day, but they may still be approaching 3-4% more than three weeks after calling at Arctic LNG 2.

Everest Energy headed for the thus far unused world’s largest floating storage barge Saam FSU in neighboring Ura Guba Bay. Transferring its cargo to the modern storage unit will help reduce boil-off rates. The LNGC remains moored alongside the FSU, satellite images show.

“There is a ticking clock element,” one expert told gCaptain. 

Marketing its sanctioned cargo already presents a challenge for Novatek. Its Chinese marketing arm was sanctioned by the U.S. last week. And these delays will make it even harder to find a buyer.

Another LNG carrier, North Sky, began offloading its cargo at the Yangkou LNG terminal over the weekend. The vessel loaded cargo from thus-far unsanctioned Yamal LNG nearly four weeks ago but had remained idle off the coast of Yangkou, China for several days. 

North Sky, together with three other newbuilds from the same order, North Mountain, North Air and North Way, was included in sanctions announced last week.

While the vessels have not carried product from sanctioned Arctic LNG 2, they were originally intended for use with the project.

“The acquisition of these four vessels represents an expansion of Russia’s existing LNG fleet and export capacity, an expansion that we have committed to blocking,” a State Department spokesperson said.

Potential buyers receiving cargo from now sanctioned North Sky will likely face the risk of secondary sanctions.

Updated: September 4, 2024 (Originally published September 3, 2024)

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