Six specialised LNG carriers built by Teekay and its Chinese partners for Russia’s Arctic-based Yamal LNG project have become entangled in the sanctions slapped on four Cosco companies by the US.
Teekay said its joint venture for the sextet is frozen under the sanctions, which were imposed earlier this week, and the company is working to release the partnership from this.
The 172,600-cbm Arc7 ships are jointly owned in a 50-50 partnership with China LNG Shipping (CLNGS). Cosco Shipping Tanker (Dalian) Co - one of the sanctioned entities - holds a 50% stake in China LNG Shipping.
Responding to TradeWinds a spokeswoman for Teekay said: “On 25 September, the United States Government, by an Executive OFAC [Office of Foreign Assets Control] Order, imposed sanctions on a number of Cosco entities, including Cosco Shipping Tanker (Dalian) Co, Ltd for allegedly trading oil with Iran.
“Cosco Shipping Tanker (Dalian) Co, Ltd is an indirect 50% owner of our TC LNG Shipping LLC, the joint venture company contracted to build and operate six Arc7 ice class vessels for the Yamal LNG project.
"That indirect 50% interest causes our joint venture company to be a “Blocked Person” under the OFAC rules," Teekay said.
"We are working to resolve this indirect ownership issue so as to avoid any disruption to the services we are providing to our customers."
Sanctions impact
Blocking is a means of controlling targeted property, OFAC states.
"Title to the blocked property remains with the target, but the exercise of powers and privileges normally associated with ownership is prohibited without authorization from OFAC," the agency says on its website.
"Blocking immediately imposes an across-the-board prohibition against transfers or dealings of any kind with regard to the property."
| Ship name | Capacity (cbm) | Built | Status |
| Eduard Toll | 172,600 | 2017 | trading |
| Rudolf Samoylovich | 172,600 | 2018 | trading |
| Nikolay Yevgenov | 172,600 | newbuilding | trading |
| Vladimir Voronin, | 172,600 | newbuilding | trading |
| Georgiy Ushakov | 172,600 | newbuilding | delivery voyage |
| Yakov Gakkel | 172,600 | newbuilding | sea trials |
On Wednesday the Trump administration sanctioned the Chinese companies in a further move to restrict Iran's oil and gas exports.
Teekay’s comments throw up fresh questions on how two other independent shipowners MOL and Dynagas, which both control Arc7 and conventional LNG carriers in partnership with Cosco-related Chinese owners for Yamal LNG, are affected.
MOL owns three Arc7s in joint venture with China Cosco Shipping and is also building a further four conventional LNG carriers for the project.
Dynagas controls five of the ice-breaking Arc7 vessels with partners Sinotrans and China LNG Shipping.
In addition, Dynagas LNG Holdings has also has four conventional LNG carriers on charter to Yamal. Dynagas LNG Partners has chartered two to the export project, while Dynacom Tankers Management, another company backed by Greek shipowner George Prokopiou, has two condensate carriers on charter to Yamal.
This story has been amended since publication to more precisely describe the ownership of vessels chartered by Dynagas LNG Partners, Dynagas LNG Holdings and Dynacom Tankers Management to Yamal LNG.
