A liquefied natural gas (LNG) tanker departing from Russia’s Portovaya plant, which was added to the U.S. sanctions list on January 10, is preparing to test buyers’ willingness to navigate the latest round of sanctions, Bloomberg reported.
The Cool Rover, which carries LNG from the Portovaya plant in northwestern Russia, is currently anchored off the coast of Spain and Portugal, according to ship-tracking data compiled by Bloomberg. Last year, the ship shipped only LNG to Europe, indicating that Portovaya’s main market.
Portovaya is the first Russian LNG export plant to be targeted in the toughest set of US sanctions to date, aimed at preventing buyers from importing and paying for Russian goods, thereby limiting the financial resources for Russia's military campaign in Ukraine.
Sanctions often do not have an immediate effect, but the case of the Arctic LNG 2 facility in 2023 demonstrated that they can cripple trade. Customers have shied away from buying LNG from the facility to avoid the financial risk of a confrontation with the US.
According to the data, Portovaya and the Novatek-led Vysotsk LNG plant - also sanctioned in this round - exported about 2.3 million tonnes of LNG in 2024, accounting for about 0.6% of total global LNG exports.
The latest sanctions on two Russian LNG plants will have less impact on Asia than the EU, as the two plants mainly serve the European market.
While the larger plants supplying LNG to Asia remain unaffected, analysts at China Futures Co said the impact on global markets was “manageable.” But for Europe, the problem is more acute. Finding alternative supplies amid rising LNG prices could strain the EU’s energy supply, especially as winter approaches.
With its latest sanctions, the US has targeted a key link in Russia’s energy sector. However, whether European customers comply with the sanctions will be the deciding factor in the success of this strategy.
