China imports more Russian LNG, testing Trump’s sanctions
China is reportedly establishing a framework to import consistent shipments of liquefied natural gas from a Russian project that has been sanctioned by the United States. This development will challenge the Trump administration’s resolve to impose penalties on Beijing as part of its strategy to limit Moscow’s energy income. In late August, China marked a significant milestone by taking the first-ever overseas export from the Arctic LNG 2 project in Russia. Now, the country is reportedly increasing its intake of blacklisted Russian LNG and has assigned the Beihai terminal in southern China to facilitate these shipments, as noted by sources familiar with the situation. Beijing’s decision to select a single port with restricted international exposure is expected to help shield its broader gas sector from potential retaliation.
Sources who spoke on the condition of anonymity due to the sensitive nature of the issue, purchases are also being conducted through a little-known company to obscure the actual end-user. In a strategic move, Chinese importers, notably state-owned Cnooc, are redirecting standard shipments away from Beihai. This decision aims to distance themselves from the trade and mitigate the risk of running afoul of the United States, which holds the title of the world’s largest LNG exporter. According to sources, several overseas traders are avoiding the port for the same reason.
The arrival of China’s first cargo from Arctic LNG 2 coincided with Russian President Vladimir Putin’s meeting with his Chinese counterpart, leading many to interpret it as a symbolic gesture. By continuing to accept deliveries, Beijing is sending a stronger signal while also risking entanglement in Washington’s efforts to pressure Moscow regarding the war in Ukraine. The Trump administration has focused its attention on India’s oil trade with Moscow, yet Beijing has not faced comparable criticism or economic penalties to date. A third shipment of fuel from the Arctic LNG 2 project is expected to arrive in southern China as early as Monday, based on ship-tracking data gathered by LiveIndex. According to the data, at least four additional vessels are currently en route.
The Russian project has faced challenges in securing buyers following sanctions imposed by former President Joe Biden’s administration in 2023, a strategic move intended to limit Russia’s energy export revenues. The facility began its LNG shipments last year using dark fleet vessels, achieving a successful delivery only to a foreign port with the shipment to China. The White House under Trump has yet to provide an official comment regarding the shipments. The Biden administration’s approach stands in stark contrast, as it swiftly imposed sanctions on companies and vessels believed to be aiding in the export of fuel from Arctic LNG 2. Chinese companies have historically approached the US market with caution, largely due to the existence of long-term contracts tied to American export facilities.
