China’s Wison New Energies At Risk of Sanctions U.S. Official Says as the Delivery of Arctic LNG Power Plant Imminent
Wison New Energies’ Zhoushan yard with modules of Arctic LNG 2 under construction. (Source: Wison New Energies)
China's Wison New Energies exposes itself to significant sanctions risk if it delivers the power plant to Russia’s Arctic LNG 2 project, a U.S. state department official stated to HNN. Two of the three vessels carrying the massive modules have now arrived at Russia’s doorstep after a month-long voyage across the partly ice-cover Arctic.
Earlier this month HNN uncovered a elaborate plan to deliver a power station from a Chinese construction yard owned by Wison New Energies to Russia undetected.
After a month-long journey the first elements of the Chinese power plant are now set to arrive at the sanctioned Arctic LNG 2 project in the coming days. Two of the three vessels carrying power generation modules have reached the waters of the Ob Bay after navigating challenging ice conditions with the help of a nuclear icebreaker.
U.S. officials have been adamant about stopping the expansion and operationalization of Russia’s flagship liquefied natural gas (LNG) plant. Asked for comment on Wison’s continued attempts to deliver vital technology to the project, Assistant Secretary of State for Energy Resources Geoffrey Pyatt, affirmed the U.S.’ determination to stop the project.
“Any individuals or entities that provide material support to, or in support of, LLC ARCTIC LNG 2 or any other U.S.-designated entities expose themselves to significant sanctions risk,” Pyatt stressed in comments provided to HNN over the weekend.
Wison New Energies has repeatedly deflected responsibility for the attempted delivery of the modules, instead pointing to third-party logistics providers.
The intent of our actions in this space has been clear
Only days away
Pyatt’s statement suggests that the company may face blocking measures if it offloads the modules at Russia’s Arctic LNG 2 in the coming days.
The U.S. State Department previously designated another Chinese construction company, Penglai Jutao Offshore Engineering Heavy Industries Co. Ltd. (PJOE), that provided material support for the project.
“The intent of our actions in this space has been clear. Our sanctions continue to target those involved in attempts to expand Russia's energy production and export capacities, an expansion we and our G7 partners have committed to blocking,” Pyatt continued.
U.S. efforts have targeted both technology providers, like PJOE and Wison New Energies, as well as shipping operators. Across several rounds of sanctions a number of shipping companies carrying modules as well as transporting LNG have been sanctioned.
In total the U.S. has thus far sanctioned four heavy lift vessels carrying modules to Russia and nine LNG carriers transporting product from Arctic LNG 2. Singapore-based Red Box shipping company became a key target of U.S. sanctions earlier this year.
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The two-pronged approach has resulted in sustained success in slowing down the operationalization of Russia’s largest LNG facility and has brought to a halt the outflow of any super-chilled gas it produced.
The first production line, Train 1, began exports in August and despite extensive efforts to deliver gas to markets through a shadow fleet of LNG carriers, no product has been delivered in nearly three months. And as a further testament to the impact of U.S. efforts, Train 1, ceased production earlier this month and was placed in standby mode for winter.
Successful delivery of the Wison power plant would allow the second production line, Train 2, to come online in 2025.
“Attempts to operationalize the Arctic LNG 2 project will continue to be met with a swift U.S. government response, as will other attempts to expand Russia’s energy production and export capacities,” Pyatt confirmed to HNN.
“We are intent on imposing costs on Russia for its unprovoked and unjustified war against Ukraine and limiting its ability to leverage its energy resources for political leverage,” he concluded.
Interacting with sanctioned vessels
While the power plant modules have not yet reached Russian soil and may thus not place Wison New Energies in violation of existing sanctions at this time, the company’s interaction with already sanctioned vessels almost certainly does.
Both Hunter Star and Nan Feng Zhi Xing have been designated by the U.S. for carrying modules to Russia. The vessels each loaded two power generation modules constructed at Wison’s Zhoushan yard at the end of September. Interacting or transacting with blocked vessels exposes any individual or entity to “significant sanctions risk” the State Department’s Bureau of Energy Resources confirmed.
Wison has not responded to requests for comments aside from its original statement on September 30.
