The United States government has imposed sanctions on Gotik Energy and Pilo Energy for engaging in deceptive practices related to exporting liquefied natural gas (LNG) from a Russian project that is already under US sanctions.
These sanctions were announced as part of efforts to undermine Russia’s ability to operationalize its Arctic LNG 2 project, a large-scale development expected to produce around 19.8 million metric tonnes of LNG annually.
The US Department of State released a statement on Thursday outlining the new sanctions. According to the statement, these actions specifically targeted two companies and two ships involved in attempts to export LNG from the Arctic LNG 2 project. The project is located in the Arctic region of Russia, an area with significant natural resources.
The two India-registered companies named in the announcement were Gotik Energy Shipping Co (Gotik) and Plio Energy Cargo Shipping OPC Pvt Ltd (Plio Energy). The State Department revealed that these firms were connected to the LNG carrier ship “New Energy,” which attempted to transport LNG from the Arctic LNG 2 project through underhanded methods. Gotik was listed as the ship’s owner, while Plio Energy acted as its commercial manager.
Deceptive Practices Used to Transport Russian LNG
The sanctions stemmed from an incident on August 25, where the ship “New Energy” reportedly used deceptive shipping techniques to load LNG cargo from the sanctioned Arctic project. These techniques included switching off the ship’s automatic identification system (AIS), which is used to track vessels, making it harder for authorities to trace its location. The ship loaded LNG through a ship-to-ship transfer with another carrier, “Pioneer,” which had already been blocked by US sanctions earlier, on August 23.
The use of deceptive shipping practices is a critical concern for international authorities as it allows countries and companies to evade sanctions. In this case, turning off the AIS allowed “New Energy” to mask its movement and cargo transfer, making it appear as if it was not involved in any illegal activity.
US Sanctions Intensify Russian Payment Issues with Its Allies China, Turkey and India
In addition to the sanctions on “New Energy” and “Pioneer,” another vessel, “Mulan,” was also added to the list of targeted ships. The vessel “Mulan” was found to be managed and operated by Plio Energy, further linking the Indian firm to attempts at transporting Russian LNG through deceptive methods.
As a result of these actions, both Gotik and Plio Energy were added to the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list. Being placed on this list means that both companies, along with their assets, are now blocked under US jurisdiction, and US citizens are generally prohibited from engaging in transactions with them.
India-Registered Firms Involved in Repeated Sanction Violations
This isn’t the first time India-registered firms have been caught violating US sanctions related to Russia’s Arctic LNG 2 project. In August, another company based in India, Ocean Speedstar Solutions OPC Pvt Ltd, was similarly sanctioned by the United States for attempting to transport LNG from the Arctic region.
US Threatens India with Sanctions Over Iran’s Chabahar Port Deal
The US Treasury Department explained that Russian companies have been trying to sidestep sanctions and keep the Arctic LNG 2 project running by using third-party firms from different countries. Many of these companies are set up as front organizations to acquire secondhand LNG tankers that Russia needs to transport gas from its Arctic LNG 2 project. The shortage of available tankers has forced Russia to rely on these deceptive practices.
Two LNG carriers, “Pioneer” and “Asya Energy,” were acquired by Ocean Speedstar Solutions, the same company sanctioned in August. Both ships were involved in suspicious activities, including turning off their AIS and providing false location data while transporting LNG from Russia. Commercial satellite imagery later revealed that the vessels had entered Russian waters and loaded LNG at the Utrenneye terminal, part of the Arctic LNG 2 project.
Cargo Ship at Arctic LNG 2 Terminal: A Bold Move in Russia’s Sanctions-Evasion Playbook
From August 1 to August 3, the “Pioneer” was captured loading LNG, while “Asya Energy” was seen engaging in a similar operation from August 9 to August 11. The US government used this evidence to justify its sanctions on Ocean Speedstar Solutions, as well as the ships involved in the deceptive transport activities.
Impact of the Sanctions
The US government has been aggressively targeting companies and vessels involved in violating sanctions, particularly those attempting to support Russia’s energy projects. By imposing these measures, the US aims to cut off Russia’s ability to profit from its natural resources, which play a significant role in its economy. The Arctic LNG 2 project is a key part of Russia’s plans to expand its gas exports, and disrupting it through sanctions is a strategic move by the US to weaken the country’s economic power.
These sanctions send a clear message that the US is closely monitoring companies worldwide that engage in activities to support sanctioned Russian projects. The inclusion of Indian-registered companies in this wave of sanctions underscores the global reach of US efforts to enforce its sanctions on Russia. Furthermore, the repetitive nature of the violations by India-based firms highlights the challenges in enforcing international sanctions, particularly when it comes to energy resources.
In conclusion, the sanctions on Gotik Energy Shipping Co and Plio Energy Cargo Shipping mark a continuation of the US government’s efforts to clamp down on deceptive practices used by companies worldwide to help Russia export LNG from its Arctic projects. With Russia facing significant economic pressures, its reliance on third-party countries and companies for LNG transportation has come under increasing scrutiny, resulting in more sanctions for those caught in the act.
