US sanctions have been imposed on the shipowning entities behind three specialised ice-breaking LNG carrier newbuildings ordered to ship cargoes from the Russian Arctic.
As TradeWinds earlier reported, the US Treasury Department’s Office of Foreign Assets Control (Ofac) also lists Zvezda Shipbuilding Complex, which is completing a further five of the Arc7 newbuildings for Novatek’s Arctic LNG 2 project.
A contract with Samsung Heavy Industries on 10 more LNG newbuildings that were to be completed by Zvezda has been “suspended”, the shipbuilder recently clarified to TradeWinds.
In addition, Ofac named Smart LNG — which was to own most of the 21 LNG carrier newbuildings for Arctic LNG 2 — as a sanctioned entity. The company is a joint venture between Russian shipowner Sovcomflot and energy company Novatek.
Ofac included Elixon Shipping, Azoria Shipping and Glorina Shipping on its new sanctions list on Friday. These are the three single-purpose shipowning entities of three Arc7 newbuildings under construction at Hanwha Ocean which were originally contracted by Russian shipowner Sovcomflot.
The company names are listed as the claimants in documentation filed by the shipbuilder — then Daewoo Shipbuilding & Marine Engineering (DSME) — which detailed a claim being made against it for contract terminations.
DSME, which has since been taken over by Hanwha Group and is now Hanwha Ocean, cancelled the newbuilding contracts on all three Sovcomflot ships in 2022 as Western sanctions against Russia made it increasingly difficult for foreign equipment suppliers and contractors to work on the vessels.
The shipbuilder opted to continue building the trio of vessels for its own account.
Sovcomflot, via the newbuilding companies on the three vessels, is currently engaged in arbitration over the contract cancellations with Hanwha Ocean through the Singapore International Arbitration Centre.
The three further Arc7 newbuildings, which were also contracted at Hanwha by Japan’s Mitsui OSK Lines, do not appear to be included in new sanctions listings but this has yet to be clarified.
The spotlight has been shone on the six newbuildings in recent months as they neared completion.
All six vessels are being built to ship cargoes from Russian energy company Novatek’s Arctic LNG 2 project in the Russian Arctic.
The US has already slapped sanctions on this project and on Thursday the UK followed suit.
In February, an apparent name change of the owner for the first of the former Sovcomflot LNG carriers, the 172,600-cbm Pyotr Kapitsa, to a company linked to Novatek stirred fresh interest that delivery moves were underway.
But the name change has since been reversed back to Hanwha Ocean.
The shipbuilder is owned by Hanwha Group which among its interest is also a defence contractor with strong links to the US.
Ofac added a long list of companies, people and ships to its sanctions list today on the eve of the second anniversary of Russia’s invasion of Ukraine and following the death in custody of Russian government critic Aleksei Navalny.
