UK turns to Russian project targeted by sanctions for gas supply

14 Dec 2017   United Kingdom

British homes are set to be heated over the new year with gas from a Russian project targeted by US sanctions, as the shutdown of a key North Sea pipeline slashes domestic output and sends utilities and traders scrambling for supplies. The first tanker of liquefied natural gas from the Yamal LNG project in Russia’s Arctic, which was opened by President Vladimir Putin last week, is making its way to the Isle of Grain import terminal in Kent as UK gas prices soar.

The shipment of the super-chilled cargo to the UK, which was originally expected to go to Asia, will be cheered in the Kremlin, where the Yamal LNG project has been held up as evidence that it can withstand western sanctions. Moscow has insisted that Europe will remain reliant on Russia for gas. 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 stepped up criticisms more recently, accusing Moscow of meddling in elections and attempting to “weaponise 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 three-decade-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. While it is not unusual for the UK to import small amounts of Russian gas that has come by pipeline through other European countries, the scheduled arrival on December 28 of the Christophe de Margerie LNG tanker will be the first delivery to arrive by ship, with the loading of the tanker personally overseen by Mr Putin last week.

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.

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