LONDON (Reuters) - U.S. sanctions on two units of Chinese shipper COSCO hit the liquefied natural gas (LNG) tanker industry on Monday as U.S.-listed Teekay LNG (N:TGP) said its joint venture in Russia had been "blocked" for its ties to COSCO.
The United States imposed sanctions on the two units - COSCO Shipping Tanker (Dalian) Co, Ltd and its subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co, Ltd - for allegedly carrying Iranian crude oil.
Teekay LNG said on Monday its 50-50 Yamal LNG Joint Venture had been deemed a "blocked person" under the sanctions as its partner China LNG Shipping (Holding) Limited (CLNG) is 50% owned by COSCO Dalian.
"As a result of CLNG’s 50% interest, the Yamal LNG Joint Venture also currently qualifies as a "Blocked Person" under OFAC rules," Teekay said in a statement, referring to the Executive Office of Foreign Assets Control (OFAC) Order.
The venture owns four operational Arc7 ice-breaking tankers - the Eduard Toll, Rudolf Samoylovich, Nikolay Yevgenov and Vladimir Voronin - which carry gas from the massive Yamal LNG production facility in the Russian Arctic.
Yamal LNG is operated by Russian independent gas producer Novatek (MM:NVTK).
A fifth Teekay Arc7 tanker, the Georgiy Ushakov, is heading to Yamal, having been built and tested over the summer around South Korea's Daewoo Shipbuilding and Marine Engineering (DSME) (KS:042660) shipyard. A sixth, Yakov Gakkel, is undergoing sea trials.
A Novatek spokeswoman declined to comment immediately.
Due to the Arctic conditions, the ice-breaking ARC7s are critical for carrying LNG produced at Yamal westwards to Europe and eastwards to Asia.
There are currently 14 such tankers in operation with Dynagas (N:DLNG), Sovcomflot and Mitsui OSK Lines (T:9104) owning the others.
