China Continues to Deliver Prefabricated Modules in Support of Russia’s Arctic LNG 2 Project

By Malte Humpert, High North News - January 8, 2024
274
Audax image
Audax transporting Novatek’s LNG modules across the Arctic. (Source: Red Box Energy Services)

Two ice-capable heavy lift vessels, Audax and Pugnax, departed China with new modules for Arctic LNG 2. The continued delivery of equipment highlights the challenge Western officials face in stopping Novatek from completing its latest project through sanctions.

Despite mounting Western sanctions Novatek continues to receive prefabricated modules for its Arctic LNG 2 project. Two heavy lift vessels, Audax and Pugnax, departed from Penglai, China on January 6th with destination Murmansk, Russia.

Satellite imagery indicates Audax and Pugnax loaded liquefied natural gas (LNG) modules during a six-day period in late December and early January. By January 8th they had entered the Sea of Japan heading north toward the Bering Sea.

A winter transit of the Northern Sea Route (NSR) routinely takes around three weeks and both vessels are estimated to arrive in Murmansk in mid-February.

Audax and Pugnax in the Chinese port of Penglai on January 1st. (Source: Planet.com)

The ice-capable vessels received permits to transit the Northern Sea Route on December 28th where they will likely rendezvous with nuclear icebreaker Arktika to attempt the mid-winter crossing.

Audax previously completed a winter voyage in February 2022, also carrying modules for Novatek.

Route of Pugnax and Audax as they round South Korea heading north (left map) and icebreaker Arktika operating near the Bering Strait (right map). (Source: Shipatlas)

Despite new US sanctions

While the US recently ramped up sanctions to “kill the project”, its efforts have thus far been unable to halt the delivery of modules to Novatek’s Belokamenka construction yard near Murmansk.

The transport of equipment used for the production of liquefied natural gas by European companies has been banned since the EU’s 5th sanction package. But it is unclear to what degree the ban has been enforced or if the sanctions apply to the vessels’ operator.

Red Box Energy Services, shipping manager of both vessels, previously operated as RBES B.V., a Rotterdam-based private limited company.

However its website has since been scrubbed of information leading back to its Dutch origin and instead it does business as Red Box Energy Services Pte Ltd out of Singapore. The company did not respond to requests for comment.

Red Box Energy Services’ website in June 2023 (left) and January 2024 (right). (Source: Internet Archive)

Red Box’s case highlights how companies are frequently able to continue providing their services despite economic sanctions, a fact especially true in maritime shipping. Russia has managed to rely on a growing shadow fleet of tankers to continue exporting crude oil to buyers around the world.

Russia’s cooperation with China remains key to completing construction of the second and third train of the Arctic LNG 2 project.

The first train, or production line, began production in late December 2023, though Novatek faces mounting obstacles to delivering LNG from the Gydan peninsula to markets in Europe and Asia as it faces a shortage of ice-capable carriers.

Its international partners also declared force majeure due to US sanctions, which leaves in limbo off-take agreements for millions of tons of LNG.


High North News is an independent newspaper published by the High North Center at Nord University in Bodø, Norway.