Tanker With Russian Gas Arrives in U.S. Despite Sanctions

A tanker carrying liquefied natural gas (LNG) from the sanctioned Russia Yamal plant in the Arctic has arrived in Boston Harbour, where it will be offloaded for New England users, the Washington Post reported.

The giant tanker is carrying the first LNG exported by the Yamal facility, a US$27 billion project whose majority owner is the Russian company Novatek. As of Sunday (Jan 28) evening, the liquefied gas was being transformed back into gas form at an LNG terminal in Mystic River, after which it will be distributed to consumers.

In July 2014, the U.S. Treasury Department issued sanctions aimed at weakening Russia’s energy sector, after Russia annexed Ukraine’s Crimea and Moscow backed separatists in eastern Ukraine. The sanctions forbid any financing for projects belonging to Novatek, Russia’s largest independent producer of natural gas.

According to analysts, the recent extreme cold weather spell in New England coupled with the shortage of pipeline capacity from gas-rich Pennsylvania have created an appetite for natural gas imports even as the U.S. has started exporting LNG from other terminals on the Gulf Coast.

“It is expected to be in the port over the weekend,” Luke Pinneo, chief petty officer at the U.S. Coast Guard in Boston, was quoted as telling the media. He added that the delay in bringing the ship into the harbor “is not unusual.”

Inspections could last for three days, depending on the time line for getting a Coast Guard boat with a boarding team to it and the specific safety concerns being addressed, he said.

Russian state-owned shipping company Sovcomflot delivered gas from Siberia’s Yamal LNG, a joint venture established by Russia’s Novatek, France’s Total and China’s CNPC, to a terminal on Britain’s Isle of Grain late last year, according to Reuters.

Malaysia’s Petroliam Nasional Berhad then sold the product to Engie SA, a French company. The gas was loaded on the Gaselys, a ship bound for New England with a mixture of liquid natural gas from multiple locations. While the delivery was delayed, the ship is expected to make port in the very near future.

The delivery of Russian liquid natural gas to Everett terminal is reportedly unprecedented. But, as the liquid natural gas on board the tanker is now the product of a French company, not the original Russian producer, its arrival in the U.S. is not technically a violation of the Obama-era prohibitions.