EU companies help Kremlin implement strategic Arctic project

Several European companies have been bypassing EU sanctions to play a critical role in Russia's development of Arctic LNG 2, a major new project for the production and liquefaction of natural gas in the far north of Siberia.

Source: Investigations published on 19 October by the German media outlet Der Spiegel/ZDF and the French newspaper Le Monde, which are based on analyses conducted by the Anti-Corruption Data Collective; materials from a campaign initiated by Razom We Stand to stop the expansion of Russian fossil fuel exports

One of the businesses that came to the attention of the investigators is German-based engineering company Linde.

Although Linde publicly announced the termination of any new projects in Russia after the invasion of Ukraine in February 2022, the company faithfully fulfilled its contracts for Arctic LNG 2. Linde sent at least three shipments of equipment to Russia, including one that was registered by Russian customs on 1 June 2022.

The actual delivery in 2022 may have taken place before the sanctions came into force.

However, the investigators point out that Linde willingly supplied heat exchangers for the project in 2018, four years after Russia's illegal annexation of Crimea, when the US had already imposed sanctions on Novatek, the leader of the Arctic LNG 2 project.

Technip is another company that attracted the investigators’ attention.

Although Technip signed the contract to manage international aspects of the project in 2019, before Russia's full-scale invasion of Ukraine, the company was in a hurry to complete as much work as possible before EU sanctions came into force.

Overall, the investigation showed that since February 2022, equipment for Arctic LNG 2 has been shipped to companies from the UK, Italy and the United States.

Russian customs data shows that since the invasion of Ukraine, the project's leading trading company has been supplied with equipment from Europe worth US$400 million.

Thanks to the help of Western engineering companies, Russia was able to complete the first production line of the project exactly on schedule, despite the sanctions – in July 2023.

"Poring over Russian customs data and satellite imagery, we found that companies like Linde and Technip have gone down to the wire in order to keep their Russian customers happy," said Data Desk partner Sam Leon.

If the other two parts of the project are also completed, Arctic LNG 2 will produce 19 million tonnes of LNG per year and contribute to the Kremlin's goal of using the Northern Sea route to export 100 million tonnes of liquefied natural gas per year.

"Thousands of Ukrainians have been killed by Russian missiles, bullets and bombs in Ukraine, while the EU has increased imports of liquefied natural gas from Russia. Lethal Russian weapons were largely paid for by the growing export of Russian LNG, which European companies facilitated," said Svitlana Romanko, director of Razom We Stand.

"We are still waiting for the EU to impose effective sanctions against the Russian energy sector. How can democratic European leaders who support us, on the one hand, declare that they are against Russian brutality against us and, on the other hand, allow European companies to continue supporting Russian gas expansion? We demand that the EU finally introduce an effective ban on the transhipment of Russian LNG in European ports and strengthen export controls over any equipment, software or technologies provided for Putin's strategic projects, such as Arctic LNG 2," Romanko added.

At the same time, the investigators note that the replenishment of Russian projects with Western assistance is not the only problem associated with this project.

Back in 2021, a group of nearly 40 MEPs criticised the project for its impact on the climate, environment and the rights of Indigenous communities.

The project has been put on a list of "carbon bombs" that will emit more than a billion tonnes of carbon dioxide into the atmosphere during their lifetime.

Background:

In September 2023, the US State Department imposed sanctions on companies that play a crucial role in constructing and operating Arctic LNG 2 and their subsidiaries.

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