Sanctioned Ship Spotted Transferring Arctic LNG 2 Cargo

A U.S.-sanctioned gas tanker that picked up a cargo from Russia's new Arctic LNG 2 plant this month has been spotted carrying out a ship-to-ship transfer, suggesting Moscow is managing to continue some exports from the project.

Monitoring service TankerTrackers.com said in an X post on Monday that the Pioneer had conducted a transfer to the Palau-flagged, UAE-owned and Indian-managed New Energy tanker north of the Suez Canal.

The Arctic 2 LNG plant, which was planned to be Russia's largest, started producing LNG in December, but its exports have been hindered by Western sanctions over Russia's actions in Ukraine.

Ship-to-ship transfers usually unload LNG from costly ice-class tankers onto cheaper conventional gas carriers, but can also be used to complicate cargo tracking. While some countries, including India, continue to buy Russian energy despite Western sanctions, they are sometimes wary of advertising the fact to try to avoid diplomatic tensions.

The United States said on Friday it had sanctioned more Russian entities and individuals over the war in Ukraine.

It also said that Pioneer and another tanker, Asya Energy, entered Russian waters in late July and engaged in a number of "deceptive shipping practices", such as shutting off the vessels' automatic identification system (AIS).

It said that Pioneer loaded LNG from the Arctic LNG 2 plant from Aug. 1-3.

According to the U.S. Department of State, Asya Energy was also captured by commercial satellite imagery loading LNG from the Utrenneye terminal at the Arctic LNG 2 facility from Aug. 9-11.

Russia says the Western sanctions are illegal and are imposed to help U.S. LNG exporters.

Arctic LNG 2 had been expected to reach an eventual output of 19.8 million metric tons of LNG per year and 1.6 million tons per year of stable gas condensate from three trains.

However, the project could be scaled back due to the sanctions, which make it harder to secure gas carriers for shipments and to access equipment needed to produce the gas.

(Reuters - Reporting by Reuters; Editing by Mark Potter)