Report: China to seek exemptions to US sanctions on Russian LNG

MOSCOW, Dec 22 (PRIME) -- China is preparing to ask the U.S. for exemptions to sanctions on a new Russian liquefied natural gas (LNG) export plant, as companies seek to prevent disruptions to the flow of a fuel crucial to heating homes and powering industry, Bloomberg reported on Friday citing people with knowledge of the matter requesting anonymity.

State-owned Cnooc Ltd. and China National Petroleum Corp. each has a stake in Novatek PJSC’s Arctic LNG 2 project in Russia. The companies are planning to ask for the exemptions because the U.S. measures threaten deliveries, according to the sources.

The U.S. imposed sanctions on the facility in November, as it widened restrictions on Russian firms in the wake of Moscow’s operation in Ukraine.

LNG vessels could fall foul of U.S. sanctions if they pick up fuel from Arctic LNG 2, the people said. Cnooc and CNPC also purchase LNG from the US, and do not want to endanger their supply from American projects, the people added.

China is the world’s biggest buyer of LNG, and also imports large quantities of Russian gas via overland pipelines. Cnooc and CNPC didn’t immediately respond to emails seeking comment.

The request would be rare for China, which tends to find ways to work around sanctions imposed by its geopolitical rival. For example, Russia has been able to sidestep restrictions on its oil shipments to China with the assistance of a “dark fleet” of tankers that are separate from the wider industry and can conceal the origin of their cargoes. But LNG vessels are specially designed to ferry the super-chilled fuel from enormous export facilities, and hiding their movements is nearly impossible.

Meanwhile, the start of exports from Arctic LNG 2 is at risk of being delayed after Novatek declared force major on shipments to some of its buyers following the U.S. measures. Novatek had planned to start production from the first of three trains by the end of the year, with shipments commencing in early 2024.

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