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Novatek in talks on LNG transhipment after U.S. sanctioned COSCO

London - Russia’s liquefied natural gas producer Novatek is in talks to tranship its Yamal cargoes in Norway or Russia’s Murmansk because it is unsure of the impact of U.S. sanctions on the Chinese COSCO tankers it uses

London - Russia’s liquefied natural gas (LNG) producer Novatek is in talks to tranship its Yamal cargoes in Norway or Russia’s Murmansk because it is unsure of the impact of U.S. sanctions on the Chinese COSCO tankers it uses, a Novatek official told Reuters.

The United States imposed sanctions on Sept. 25 on state-owned COSCO’s subsidiaries, COSCO Shipping Tanker (Dalian) Co and COSCO Shipping Tanker (Dalian) Seaman & Ship Management, for allegedly ferrying Iranian crude. U.S.-listed ship owner Teekay LNG said last week its shipping joint venture in Russia, Yamal LNG, had been “blocked” by the U.S. Treasury because its partner China LNG Shipping (Holding) is 50% owned by COSCO Dalian.

The Yamal venture owns four operational and two newly built Arc7-class LNG tankers capable of navigating through Arctic ice, making them key to transporting LNG from Novatek’s Yamal LNG plant in northern Russia. “We have nothing to do with the sanctions, but we don’t know if the sanctions may affect the ships owned by the (Yamal LNG shipping) joint venture,” Novatek Chief Financial Officer Mark Gyetvay said on Tuesday.

“We have responsibilities before our customers to deliver LNG so we need to protect ourselves,” he added on the sidelines of an Oil & Money conference. At the moment, four Yamal LNG JV vessels are still in use. A fifth is heading to Yamal after its sea trials around South Korea’s Daewoo Shipbuilding and Marine Engineering (DSME) shipyard. A sixth is undergoing tests.

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