EU shipyards are fixing Russia’s Arctic LNG tankers

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EU shipyards are refurbishing Russian ice-class tankers and offering them dry docks, allowing Moscow to continue transporting gas to the Arctic despite Western sanctions on its energy sector.

Without maintenance work provided by the Damen shipyard in Brest, France, and Fayard A/S in Denmark, Russia’s Yamal LNG plant will struggle to access key markets in the winter, when gas prices are at their highest in the northern hemisphere.

The two yards handled 14 of the 15-strong fleet of specialized Arc7 tankers shipped from Yamal LNG on Russia’s far northern coast, according to data from Kpler and analytics firm Satellite Imagery and port tracking data.

“If those two shipyards were banned, it would put the entire logistics operation in doubt,” said Malte Humpert, an arctic shipping specialist at High North News who has tracked ship movements would mean going well out of their way.”

Eight of the tankers have entered Dam, while Fayard has served nine since Russia’s full-scale invasion of Ukraine in February 2022. Most of the vessels are owned by energy and shipping companies, including Greece’s Dynagas and Canada’s Teekay.

Damen confirmed it had repaired “several vessels involved in the transport of Russian LNG”, but added that it “strictly complies with European sanctions legislation” and that it is “not involved in the shipping companies operating these vessels”. to the selection of cargoes performed by

“Further repairs of these LNG vessels are not planned in the near future,” the statement said.

Fayard did not respond to a request for comment.

The withdrawal of Russian gas is a key policy goal of the European Commission, but the EU’s goal of reducing its use of Russian fossil fuels to zero by 2027 has been derailed by increased imports of Russian LNG, which is mainly supplied from Yamal.

Vessels and yards are not allowed to operate in energy carrier sectors and not under the Russian flag, and specialized tankers will not be able to distribute their cargoes without the technical expertise and maintenance of European yards.

The only one in the fleet that has not departed from either yard is the Christophe de Margerie, owned by the sanctioned Russian shipping company Sovkomflot.

On December 16, the EU agreed to impose sanctions on the ship, the first move by the bloc to sanction Yamal’s activities.The US has already hit the Yamal project with waves of sanctions.

Christophe de Margerie’s inability to access repair yards in Europe put the ship out of service for six months, showing Arc7’s dependence on European know-how and parts, Humpert said.

From Yamal, ships can sail to Europe or take the much longer and more dangerous Northern Sea Route to China.

The Arc7 LNG carriers were built in South Korea at a cost of about $333 million per vessel, according to research by the Oxford Institute for Energy Research.

They are over 200m long and can carry around 170,000 cubic meters of natural gas with a specially designed Azipod propulsion system for navigating through thick ice.

One European ship dealer said French and Danish yards, which both have dry docks large enough for large tankers, “are the only ones that can handle Arc7s and are in the right place at the same time”.

While Russian crude oil and coal have been sanctioned, gas has remained outside the bloc’s sanctions regime amid concerns about security of supply.

In a first step towards phasing out shippable gas imports, EU countries agreed in June to ban Russian LNG shipments from March.

Yamal LNG exported 20.9 billion cubic meters to Europe in 2023, according to OIES, of which about a quarter was sent to destinations outside the bloc. According to the Bond Beter Leefmilieu research center, supplies from Yamal were close to Russian LNG imports to the EU 85-90 percent.

Additional reporting By Shotaro Tani in London