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Summary
- China receives first LNG cargo from sanctioned Russian project
- Putin to meet Xi at Shanghai Cooperation Organisation summit
- Potential signal for other buyers if no US reaction, analyst says
SINGAPORE, Aug 29 (Reuters) – China received this week its first liquefied natural gas cargo from a sanctioned Russian project, ship-tracking data from Kpler and LSEG showed, days ahead of Russian President Vladimir Putin’s meeting with Chinese President Xi Jinping.
Putin is among more than 20 world leaders, including Indian Prime Minister Narendra Modi, who will attend the Shanghai Cooperation Organisation summit in China’s northern port city of Tianjin on Sunday and Monday, where he is expected to meet Xi to revive trade between the countries.
The meeting is expected to mark another diplomatic coup for Russia, which has had sanctions imposed by the U.S. and European Union for its full-scale invasion of Ukraine in 2022, after Putin held talks with U.S. President Donald Trump in Alaska earlier this month on a potential peace agreement.
The tanker Arctic Mulan LNG, carrying LNG from the Arctic LNG 2 project, which is targeted by the sanctions, berthed at China’s Beihai LNG terminal in the southern region of Guangxi on Thursday, data from Kpler and LSEG showed. The cargo came from a storage facility in the Russian Far East that has only received cargoes from Novatek’s Arctic LNG 2 project.
The delivery marks the first time superchilled fuel from the project reached an end-user since it started up last year.
“China and Russia are testing the waters,” said Anne-Sophie Corbeau, researcher at Columbia University’s Center on Global Energy Policy, in a post on LinkedIn.
“If this one goes through without any U.S. reaction, that could be a signal for China and other buyers that it would be ok to buy sanctioned Arctic LNG 2 cargoes. India could be next in line for a Russian LNG cargo, especially at an attractive price.”
PipeChina, the Beihai LNG terminal’s operator, did not immediately respond to a request for comment.
Arctic Mulan is currently still near the Beihai LNG terminal. Reuters has not been able to find any contact information for its registered owner, and its ship or commercial manager.
Tanker with sanctioned Russian Arctic LNG 2 cargo berths in China
“It may have a political greenlight, and it is unlikely that Russia and China would proceed without some form of assurance that these cargo deliveries will not trigger sanctions risk for the terminal operator or lead to further consequences for Russia,” said Siamak Adibi, director for gas and LNG supply analytics at consultancy FGE.
The Arctic LNG 2 project had been due to become Russia’s largest LNG plant with eventual output of 19.8 million metric tons per year of LNG from three trains.
“If sanctions are lifted from Arctic LNG 2, some 12 million tons per annum of additional LNG could reach the market within a relatively short period, providing additional supply relief,” Adibi said.
Reporting by Emily Chow, additional reporting by Sam Li in Beijing; Editing by Florence Tan and Christian Schmollinger
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