Novatek Denies Involvement With Arctic ‘Shadow Fleet’, Official Records Suggest Otherwise
Novatek chairman Leonid Mikhelson accompanied by Russian President Vladimir Putin at the Arctic LNG 2 construction site. (Source: The Kremlin)
Russia's largest natural gas producers Novatek, issued a forceful statement that it is not involved in the establishment of the LNG shadow fleet. However, sanctions documents and a company report showing office addresses and ownership structures tie the company to the operation.
Russia’s largest liquefied natural gas (LNG) producer, Novatek, defiantly denied any involvement with the emerging Arctic LNG shadow fleet, likely in an effort to shield its non-sanctioned operations related to Yamal LNG.
However, a Novatek investor relations report and U.S. sanctions documents contradict these claims and suggest that the company maintains full ownership over elements of the shadow fleet operation.
Over the past six weeks a number of vessels have attempted to avoid detection as they stealthily traveled to the sanctioned Arctic LNG 2 project, of which Novatek controls a 60 percent stake.
Thus far five cargoes have been lifted from the project, though none have been delivered to customers as the U.S. has sanctioned nearly a dozen vessels and their owners.
In a press release Novatek stated that all of Arctic LNG 2’s project activities, including operational and commercial activities, are solely controlled by the management of Arctic LNG 2.
U.S. sanctions documents, however, show a clear link between Novatek’s Murmansk operations and Arctic Transshipment LLC, a company involved in the shadow fleet operation through LNG storage barges.
Both companies are registered at the same Murmansk address at 4a ul. Spolokhi, sanctions documents reveal.
U.S. Treasury sanctions search showing the same street address for Novatek Murmansk and Arctic Transshipment LLC. (Source: OFAC)
“The fact is, Novatek is involved through the full value chain,” an industry analyst told HNN on condition of anonymity due to the sensitive nature of the issue.
Document shows ownership of Saam FSU
Novatek also denies any involvement in the loading of products from Arctic LNG 2 stating that “allegations, namely that the Company is involved in [...] loading products from the Arctic LNG 2 project, are untrue and do not stand up to facts.”
However, on at least two occasions cargo from Arctic LNG 2 has been discharged into Saam FSU, a vessel which based on U.S. sanctions documents, vessel registration information, and a 2022 Novatek investor report is controlled by Novatek.
According to the U.S. sanctions database, Saam FSU is linked to Arctic Transshipment LLC, a subsidiary of Novatek. Vessel records at Equasis, a shipping database, also confirm that the LNG storage barge is owned by Arctic Transshipment LLC.
U.S. Treasury sanctions search and Equasis shipping database showing ownership and registered address of Saam FSU. (Source: OFAC, Equasis)
Both data points are backed up further by Novatek’s own 2022 report on environmental, social, and governance, which lists Saam FSU and Arctic Transshipment as subsidiaries of Novatek. The specific tab containing the ownership information has been removed from the 2023 ESG report.
It remains to be seen if and for how long Novatek can shield its core operations, namely Yamal LNG, from sanctions spillover or direct targeting. Yamal LNG remains highly profitable and continues to export super-chilled gas at record-levels to the European market.
U.S. sanctions have begun to affect Yamal LNG operations targeting four ice-capable vessels which could have been used to expand Novatek’s Yamal LNG fleet; transport capacity the company will sorely miss once the EU transshipment sanctions come into effect in March 2025.
Novatek did not respond to requests for comment.
