Sanctions Catch up with Red Box Shipping as CEO Quits Company
Red Box vessel Pugnax delivering a module to Novatek’s construction yard earlier this year. (Source: Belokamenka on VK)
The tide continues to turn for heavy lift vessel operator Red Box and its co-founder and CEO Philip Adkins. Following designation by the U.S. treasury for continuing to do business with Russia last month, Mr. Adkins has called it quits.
A month after the U.S. placed Singaporean shipping operator Red Box on its list of sanctioned entities for its role in transporting large modules for the construction of Russian liquefied natural gas (LNG) projects, the company’s CEO has stepped down.
Philip Adkins, though not under sanctions himself, was denied the renewal of his Singaporean work permit, effectively requiring him to resign from his role, the Financial Times (FT) reported over the weekend.
Throughout several communications with HNN over the past year Mr. Adkins has maintained that his company did nothing illegal when it continued to deliver prefabricated “steel structures” from construction yards across China to an assembly yard near Murmansk in Russia. He again voiced that opinion with the FT.
“I maintain the company was always compliant with all applicable international sanctions and it is my understanding my former colleagues are actively engaged with Ofac [Office o f Foreign Assets Control] to delist the vessels — but in the meantime I am unemployed and I am no longer the CEO of Red Box,” he said.
Delivered to Russia for a decade
The company’s vessels Audax and Pugnax were specifically designed and built to carry modules through Russia’s Arctic waters even during winter. They first carried modules for the country’s first polar LNG project, Yamal LNG, and subsequently continued their work for the follow-up project, Arctic LNG 2.
Both vessels delivered critically needed modules
Red Box made several deliveries throughout 2023 and into 2024, well after Novatek, the company who majority owns the facilities, had been sanctioned. The U.S. subsequently also announced blocking measures against the construction yard and the Arctic LNG 2 project itself, but still Red Box remained undeterred.
Both vessels delivered critically needed modules to complete the second production line of that project in February 2024.
3rd production line
Red Box’s continued transports also likely ran afoul of the EU ban on the export of liquefaction technology to Russia experts have surmised repeatedly throughout the past two years. While the EU has yet to take action against the operator, the UK late last week added Red Box to its list of sanctioned entities.
Earlier this month it appeared that Audax would again pick up modules, this time for the 3rd production line of Arctic LNG 2, from the Wison Offshore & Marine Zhoushan Fabrication Yard in China. The vessel remained offshore from the facility for several weeks. An industry source confirms that Audax may have been waiting to pick up two pipe rack modules at the Wison yard. But due to escalating delays completing the modules forcing the vessel to move on, possibly to return at a later date.
The company’s other vessel, Pugnax, currently remains in Singapore raising questions if the city-state could take actions against the ship directly, one industry expert commented on the situation.
Red Box is not the only operator of heavy lift vessels that has found itself on the wrong side of broadening U.S. sanctions. Hong Kong-based company CFU Shipping was sanctioned at the same time as Red Box. Its vessel Hunter Star delivered the final module for Train 2 of the Arctic LNG 2 project.
