China’s Efforts to Import Russian Gas Under US Sanctions
China is stepping up its efforts to import Russian gas, which is under US sanctions, creating the beginnings of a domestic “shadow fleet” of vessels capable of transporting supercooled fuel and circumventing restrictions imposed on one of the Kremlin’s flagship industries. According to Bloomberg, China’s actions are aimed at further diversifying its energy supplies and strengthening ties with Russia.
The world’s largest energy importer has enough gas supplied by pipelines, often at a cheaper price. However, these alternative sea supplies are seen as a way to further diversify supplies and strengthen ties with Russia. Kremlin head Vladimir Putin has made LNG a key element of Russia’s future energy export plans, and the country is in dire need of interested buyers.
Building a ‘Shadow Fleet’
While these efforts are still in their early stages, tanker movements and ownership distribution in China are beginning to mirror trends seen in Russian oil and LNG, where a “shadow fleet” has been created to offset the loss of pipeline supplies to Europe. According to satellite and shipping data, the CCH Gas tanker, carrying blacklisted Russian cargo, is concealing its location as it approaches a Chinese port.
Its registered owner, CCH-1 Shipping Co., has an address in Hong Kong that matches the mailbox address of Samxin Secretarial Services Ltd. – a common practice for companies seeking to conceal beneficial ownership when trading fuel from Iran or Russia. Another gas carrier, recently renamed Kunpeng, appeared near Singapore with a similar structure – opaque and therefore extremely unusual for an industry that requires specialized technical skills.
Russian LNG Fleet Expansion
Since last year, Russia has been building its own dark LNG fleet, accumulating more than a dozen vessels registered to shell companies from Russia to India. This comes amid increasing pressure from the US and European governments on buyers of Russian oil and gas in connection with Russia’s invasion of Ukraine in 2022.
Creating a “shadow fleet” for LNG is not an easy task. The fact is that vessels carrying fuel with a temperature of -162°C, used in power plants and heating systems, require more complex loading and transportation technologies than other types of fuel. And while today there are almost 8,000 oil tankers of various sizes, the entire LNG industry numbers about 800, which means that concealing their location is not easy.
China’s efforts to import Russian gas under US sanctions demonstrate its commitment to diversifying energy supplies and strengthening ties with Russia. As the global energy landscape continues to evolve, it will be essential for countries like China to adapt and find new ways to meet their energy demands while navigating complex international relations.
Original Article: China lays groundwork for ‘shadow fleet’ to import Russian gas bypassing sanctions – Bloomberg — Unn