As the Trump administration slaps fresh sanctions on Russian energy companies, a cargo of Russian gas is set to power homes near Boston.
A tanker of liquefied natural gas from a Russian company on the Treasury Department’s sanctions list is scheduled to unload the fuel this weekend, making it the first shipment of gas from the country to ever reach the United States. It’s arriving just after the U.S. announced increased economic penalties Friday against Moscow-linked people and businesses because of Vladimir Putin’s 2014 invasion of Ukraine.
Technically, the gas shipment does not appear to violate the prohibitions that the Obama administration imposed four years ago — it’s owned by a French energy trader and arriving on a French-owned vessel. But it shows the difficulty of enforcing sanctions involving energy cargoes, which can change hands frequently and are often mixed with fuel from multiple locations.
The Treasury Department expanded its sanctions Friday to include 21 people and nine entities in Russia and Ukraine.
The cargo is aboard the French LNG vessel Gaselys, which has been anchored in Massachusetts Bay since Wednesday while it undergoes safety and environmental inspections, according to Chief Petty Officer Luke Pinneo at the Coast Guard’s First District in Boston. It is headed to the Everett LNG import terminal a few miles north of Boston.
“They are expected to be in port sometime this weekend,” Pinneo said.
The circuitous route that the ship took to the U.S. over the past few weeks drew attention from energy traders, and French energy trader Engie confirmed Russian gas was part of the cargo. Gas from other European sources was also included, a spokeswoman said.
The fuel shipment originated at a new $27 billion terminal on Russia’s Yamal Peninsula in the Arctic Circle operated by Yamal LNG, a joint venture among Russian gas company Novatek, France's Total and China's CNPC. Russian oil and gas shipments are not subject to U.S. sanctions put in place after Moscow's annexation of Crimea, but Yamal LNG and its majority owner Novatek have been on the sanctions list since 2014.
Novatek's designation under Directive 2 of the sanctions prohibits U.S. citizens from dealing in the company's debt instruments that stretch out longer than 90 days.
Engie loaded the Gaselys at the Isle of Grain LNG terminal in the United Kingdom, according to an Engie spokeswoman. That terminal received the first shipment of gas from Yamal, which Putin inaugurated last month.
Engie bought the gas in a one-off deal in response to the winter cold snap that has plunged much of the Northeast into freezing temperatures and sapped the region's fuel supplies. The gas was to be delivered to the Mystic Power Generation plant in Massachusetts and other local utilities, spokeswoman Julie Vitek said.
”We have communicated the fact that there is a mixture of gas aboard this cargo — we communicated that to a variety of authorities,” Vitek said. “I don’t believe they’ve flagged the Russian gas as a concern.”
The Treasury Department declined to comment on shipment, citing departmental policy, and the State Department did not respond to inquiries.