Russia-bound LNG modules make U-turn to China amid sanction threats

Two Chinese-built modules destined for a Russian liquefied natural gas project are unexpectedly being returned to China, just days before reaching their intended destination.

The Chinese Chinese heavy lift vessel Wei Xiao Tian Shi departed China thee months ago, carrying modules built by Chinese yard Wison New Energies for Novatek’s Arctic LNG 2 project.

The decision to return came just two weeks after Wison New Energies halted all project work with Russia. A Wison official confirmed to Upstream that the modules are now en route to the Zhoushan facility in Zhejiang province, where they are expected to arrive in August.

The saga began in late March when two pipe-rack modules for Train 3 of Novatek’s 20 million tonnes per annum Arctic LNG 2 project were loaded onto the Wei Xiao Tian Shi.

The vessel encountered delays in the North Sea off the coast of Norway, where it remained stationary for months.

Vessel tracking website VesselFinder shows that the current position of Wei Xiao Tain Shi is in North East Atlantic Ocean.

The vessel is heading to the port of Gibraltar, in southern Spain, where it is expected to arrive on 11 July.

The U-turn highlights the mounting influence of US sanctions on Chinese suppliers involved in Russian energy projects.

Recent measures have targeted Chinese construction yards and operators of heavy lift vessels. The sanctions now extend to specialised ships transporting completed modules from China to Russia for integration into liquefaction trains.

In 2023, Red Box Energy Services and CFU Shipping replaced Cosco, Guangzhou Salvage, Boskalis and GPO Heavylift as providers of heavy lift vessels for these China-to-Russia transports.

This switch landed both companies on the US Specially Designated Nationals (SDN) list in May.

Nonetheless, Wei Xiao Tian Shi remains absent from the sanctions list. Formerly known as Fanzhou 10, the vessel was sold to Hainan Smiling Angel Shipping in February this year.

Besides the modules aboard Wei Xiao Tian Shi, two additional units remain at Wison’s Zhoushan yard.

Last month, Wison New Energies abruptly cut all ties with Russia and put its Zhoushan construction yard up for sale, a site responsible for manufacturing dozens of critical modules for the Arctic LNG 2 project.

The drastic move came shortly after another Chinese facility, PengLai Jutal Offshore Engineering Heavy Industries (PJOE), was hit with sanctions for its involvement in module construction and shipment. The action underscored the high risk Wison New Energies would face if it continued supplying against its Russian contracts.

With the looming threat of sanctions, Hainan Smiling Angel Shipping, the vessel owner, may also be reluctant to deliver the modules. Hainan Smiling Angel Shipping could not be reached for comment by the time of publication.