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Illustrative purposes only: A gas flare, also known as a flare stack, burns at the Yamal LNG plant, operated by Novatek PJSC, in Sabetta, Russia, on Aug. 8, 2018. Novatek is one of the largest independent natural gas producers in Russia. (Andrey Rudakov/Bloomberg via Getty Images)
This audio is created with AI assistance

The U.S. State Department on Sept. 5 announced sanctions against two vessels and two entities connected to Russia's sanctioned Arctic LNG 2 project.

Arctic LNG 2, owned by Russia's Novatek company, is aimed at producing almost 20 million metric tons of liquified natural gas (LNG) per year to sell primarily to Asian markets, potentially generating billions of dollars in revenue.

It was envisaged as Russia's largest LNG plant and a flagship project that would help the country become the world's leading LNG producer.

The new sanctions come as another step by Washington designed to stifle Russian fossil fuel revenues and curb its ability to fund the war against Ukraine.

The U.S. newly designated companies Gotik and Plio Energy are the registered owner and commercial manager, respectively, of the LNG carrier New Energy.

"New Energy used deceptive shipping practices, including shutting off its automatic identification system, to load cargo from the U.S.-sanctioned Arctic LNG 2 project via a ship-to-ship transfer on Aug. 25, 2024, with LNG/C Pioneer, a vessel blocked by the United States on Aug. 23, 2024," the statement read.

The LNG carrier Mulan, operated by Plio Energy, was also sanctioned.

"The U.S. government will continue to answer attempts to operationalize the sanctioned Arctic LNG 2 project or otherwise expand Russia’s energy capabilities with a swift response," the U.S. State Department said.

The Financial Times reported in July that Russia is likely expanding its "ghost fleet" of tankers, created primarily to avoid Western oil sanctions, to LNG exports as well.

American sanctions previously targeted the Arctic LNG 2 project in a round of sanctions in late August, likely forcing Novatek to scale back the plans. Novatek itself was sanctioned after the outbreak of the full-scale invasion in 2022.

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