EU shipyards are fixing Russia’s Arctic LNG tankers

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EU shipyards are repairing Russian ice-class tankers and giving them dry dock facilities, enabling Moscow to continue moving gas through the Arctic despite Western sanctions on its energy sector.

Without maintenance work — provided by France’s Damen Shipyard in Brest and Denmark’s Fired A/S — Russia’s Yamal LNG plant will struggle to access key markets during the winter when gas prices are at their highest in the Northern Hemisphere.

The two yards serviced 14 of the 15-strong fleet of special Arc7 tankers shipped from Yamal LNG off Russia’s far north coast, according to satellite imagery and port-call tracking data and data from analytics firm Kpler. Some ships called more than once.

“If these two shipyards were off-limits, it would throw the entire logistics operation into doubt,” said Malte Humpert, an Arctic shipping expert at High North News who has tracked ship movements. “They could get services elsewhere but it would mean going well off their route.”

Since Russia’s full-scale invasion of Ukraine in February 2022, eight tankers have called on Damen, while Fayard has served nine. Most of the vessels are owned by energy and shipping companies, including Greece’s Dynagus and Canada’s Teke.

Damen confirmed that it had repaired “several vessels involved in Russian LNG transport” but added that it “strictly complies with European sanctions laws” and that it is “not involved in the cargo choices made by the shipping companies operating these vessels”.

“There are no further repairs planned for these LNG vessels for the foreseeable future,” it said.

Fayard did not respond to a request for comment.

Cutting off Russian gas is a central policy goal of the European Commission. However, the EU’s target of reducing Russian fossil fuel consumption to zero by 2027 has been overturned by rising Russian LNG imports, which are mostly supplied from Yamal.

Due to the carve-out for fuel transportation and not being Russian-flagged, vessels and yards are not allowed to operate, and specialized tankers will not be able to deliver their cargo without technical expertise and maintenance from European yards.

Christophe de Margerie is the only one in the fleet not called at either of the two yards, which is owned by authorized Russian shipping company Sovcomflot.

The EU agreed to allow the ship itself – the bloc’s first move to impose any sanctions on Yamal activities – on 16 December. The US has already hit the Yamal project with a wave of sanctions.

Christophe de Margerie’s inability to access repair yards in Europe put the ship out of service for six months, demonstrating Arc 7’s reliance on European know-how and parts, Humpert said.

From Yamal, ships could either sail to Europe or take the much longer and more dangerous North Sea route to China. Despite Novatek — the owner of Yamal LNG — experimenting with longer shipment windows, the eastbound route can only be sailed in warmer months.

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

They are more than 200 meters in length and can carry around 170,000 cubic meters of natural gas with a specially designed ‘Agipod’ propulsion system for navigating thick ice.

A European shipbroker said that the French and Danish yards, both of which have dry docks large enough for larger tankers, “are the only two capable of handling Arc7s and located in the right place at the same time”.

While Russian crude oil and coal are allowed, gas remains outside the bloc’s sanctions regime amid concerns over security of supply.

In a first move to curb imported gas imports, EU countries agreed in June to ban trans-shipments of Russian LNG. It will stop EU ports being used to move gas from ice-class tankers to less expensive regular ships for shipping to other countries.

Yamal LNG exported 20.9 billion cubic meters to Europe in 2023, according to OIES, about a quarter of which was sent to destinations outside the bloc. Some 85 to 90 percent of the EU’s Russian LNG imports are supplied from Yamal, according to think-tank Bond Better LifeMilyeu.

Additional reporting By Shotaro Tani in London