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Despite Sanctions, Russian LNG Cargo Arrives in New England

In an unusual twist, a cargo of liquefied natural gas (LNG) that originated in Russia is being unloaded from a French ship in the Boston area, even as the Trump administration tightens sanctions against Russia for its actions in neighboring Ukraine.

Engie SA spokeswoman Julie Vitek confirmed to NGI that one of its French-based company’s LNG vessels, the Gaselys, had docked at the company's Everett LNG terminal in Massachusetts on Sunday and was unloading its cargo.

"We anticipate the ship to depart late this afternoon," Vitek said Monday, adding that Engie procured the LNG cargo in a one-off deal to serve natural gas customers in New England, which hard hit by the recent cold snap.

Vitek confirmed that the LNG cargo originated from Russia's new $27 billion LNG terminal above the Arctic Circle on the Yamal Peninsula in Russia. Yamal LNG is a joint venture (JV) between Russia's Novatek OAO (50.1% stake), France's Total SA (20%), China National Petroleum Corp. (20%) and China's Silk Road Fund (9.9%).

"Additionally, in anticipation of increased natural gas demand this season in New England, we had made provisions for another spot cargo purchase -- on top of our contracted Trinidad shipments -- before winter began," Vitek said. "That cargo will come from Dunkirk and include some Russian gas as well."

Genscape Inc. analyst Hannah Burk told NGI that the LNG cargo from Yamal was offloaded at the Grain LNG Terminal on the Isle of Grain in the United Kingdom.

"Due to cold weather, New England has seen more LNG activity this winter than in recent years," Burk said between the shipments at the Canaport LNG terminal in New Brunswick and the Everett terminal, "the New England market received gas from seven LNG cargoes, including the currently offloading Gaselys, in January...Last year, the two facilities received four cargoes during January.

"Gas demand is expected to increase this week as more cold weather moves through and many pipelines in the Northeast have active operational flow orders."

During the Obama administration in 2014, the United States imposed sweeping sanctions on Russia, including the energy sector, to punish the country for its actions in Ukraine -- specifically, its annexation of the Crimean Peninsula and its ongoing support for pro-Russian separatists in eastern Ukraine.

Last Friday, the Trump administration moved to tighten the screws against Russia by expanding the sanctions to an additional 21 individuals and nine entities.

"The U.S. government is committed to maintaining the sovereignty and territorial integrity of Ukraine and to targeting those who attempt to undermine the Minsk agreements," said Treasury Secretary Steven Mnuchin. "Those who provide goods, services, or material support to individuals and entities sanctioned by the United States for their activities in Ukraine are engaging in behavior that could expose them to U.S. sanctions."

Energy security for America's allies in Europe, and the threat posed by Russia, was a recurring them last week during the World Economic Forum in Davos, Switzerland.

During a speech at the summit, President Trump said "no country should be held hostage to a single provider of energy." Meanwhile, during an interview on the sidelines of the summit, Energy Secretary Rick Perry said the U.S. "isn't about controlling a country with this energy." Both remarks were seen as a swipe against Russia.

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