BRITAIN IMPORTS GAS FROM A RUSSIAN PROJECT TARGETED BY US SANCTIONS




Robert Harneis –TDO-( FRANCE) Britain has been forced to import gas from a Russian project targeted by US sanctions, as the shutdown of a key North Sea pipeline hits domestic output.

The first tanker of liquefied natural gas from the 27 billion-dollar Yamal LNG project in Russia’s Arctic, which was personally opened by President Vladimir Putin on December 8, is currently docked in Harwich as UK gas prices soar. The shipment of the super-chilled cargo to the UK will be cheered in the Kremlin, where the Yamal LNG project has been held up as evidence that it can withstand western sanctions.

The Yamal tanker was loaded in a ceremonial launch presided over by Mr. Putin, who pushed the button to start filling the tanker in sub-30C temperatures. He hailed it as an ‘extremely important project . . .  that ensures the future of Russia and the future of its economy’. France’s Total, which has partnered with Novatek on Yamal, continued working on the project after the EU did not the follow the US in directly imposing sanctions on it. Total has called Yamal ‘the gas that came in from the cold’.

Yamal LNG, located in the Russian Arctic, is a joint project of Russia's Novatek, France's Total, China National Petroleum Corporation and the Silk Road Fund. Novatek holds a 50.1 percent share in the project. Its partners own 20 percent, 20 percent, and 9.9 percent respectively.

The UK government has taken a tough line on Russian sanctions since Moscow first intervened in Ukraine nearly four years ago, and Theresa May, Prime Minister, has been particularly shrill, accusing Moscow of meddling in elections and attempting to ‘weaponize information’ to undermine the West.

Bringing in the tanker will highlight questions about the UK’s energy strategy and the security of supplies, as it follows the shutdown of a forty year old pipeline this week that has cut off 12 per cent of gas from the UK’s portion of the North Sea, sending prices to four-year highs and sparking fears of potential shortages.

It is not unusual for the UK to import small amounts of Russian gas by pipeline through other European countries. However, the arrival on December 28 of the Christophe de Margerie LNG tanker will be the first delivery to arrive by ship.

While UK and EU sanctions do not directly target Yamal LNG, they have imposed other sanctions that cut off Russian energy companies from finance or technology for certain projects, levied after Moscow’s annexation of Crimea in 2014.

An embarrassed British Department of Business, Energy and Industrial Strategy (BEIS), which has argued that gas supplies will still be ample this winter because of the UK’s import capacity, emphasized that 80 per cent of the gas consumed in the UK is domestic or bought from Norway or Qatar. BEIS said that it was up to the market to decide what gas to import. BEIS added ‘But we can only benefit from having a diverse range of supplies.’