U.S.-Sanctioned Russian NOVATEK Funds Alaska LNG Project; Hanwha Ocean Vessels Also Mentioned

NOVATEK Provided Seed Funding to Polar LNG and Seeks Minority Stake
Former CEO Raises Concerns Over Russian Involvement
Considering Use of NOVATEK Offshore Liquefaction Facilities
Potential Use of Icebreaking LNG Carriers Built for Arctic LNG 2

Russian energy company NOVATEK, which is subject to U.S. sanctions, is reportedly funding a liquefied natural gas (LNG) development project in Alaska. There is also speculation that the project could use icebreaking LNG carriers ordered by NOVATEK from Hanwha Ocean.

The New York Times (NYT) reported on October 23, local time, that NOVATEK had provided seed funding to U.S. startup Polar LNG, which is pursuing an LNG project in Alaska. NOVATEK is also reportedly seeking to acquire a minority stake in Polar LNG.

▲ Brooks Range, Alaska. [Photo courtesy of NASA]

Joel Riddle, Polar LNG's former chief executive officer (CEO), claimed that he was unaware of the company's funding sources and Russia's involvement in the technology. He raised concerns that Russia's involvement would not serve U.S. interests and that the related technology transfers could be illegal. Polar LNG denied his claims, saying Riddle was dismissed for cause.

A legal review document from the U.S. Treasury Department also reportedly raised the possibility that the project could pose legal issues related to sanctions against Russia. The project will require approval from U.S. authorities and a review of sanctions-related issues.

Polar LNG is pursuing a project to liquefy natural gas from Alaska's North Slope and supply it to Asian markets. To do so, it is considering purchasing and installing offshore a gravity-based structure (GBS) of approximately 640,000 tons owned by NOVATEK. A GBS is a structure that can be used to install LNG production and liquefaction facilities.

If NOVATEK's offshore liquefaction facilities are introduced for the project, Russian LNG technology and equipment would be used in energy development in the United States. However, whether they will actually be used and the project timeline have not been confirmed.

Icebreaking LNG carriers built by Hanwha Ocean have also been mentioned in connection with the project. Hanwha Ocean built icebreaking LNG carriers for NOVATEK's Arctic LNG 2 project, but the related contracts and deliveries were suspended or canceled due to Western sanctions against Russia. It has not been confirmed whether those vessels could be used in the Alaska project.

The Alaska LNG project has reportedly also come up in discussions between the United States and Russia. Russian President Vladimir Putin and U.S. officials are said to have discussed the project, but the details of any agreement and the scope of participation have not been disclosed.

For the project to proceed, it would need to clear permitting and technical reviews and address environmental concerns, in addition to obtaining approval from U.S. authorities. A key question is whether funds and equipment from a Russian company can be used in a U.S. project while sanctions against Russia remain in place.

This project is separate from the Alaska gas pipeline project that South Korea, Japan and Taiwan, among others, have considered. The pipeline project envisions transporting natural gas produced in Alaska over long distances through a pipeline, while Polar LNG is pursuing a plan to liquefy gas offshore and transport it on icebreaking LNG carriers.

This content was produced with the assistance of AI translation services.