Russia Builds Shadow Fleet to Transport LNG Ahead of EU Ban — Intelligence

Russia is rapidly building a fleet of shadow LNG carriers in anticipation of the EU's complete ban on Russian liquefied natural gas imports, set to commence on January 1, 2027, according to Ukraine's Foreign Intelligence Service, as reported by UATV English. The agency alleges that the Kremlin is purchasing aging LNG carriers from the secondary market and commissioning new vessels.

Over 65% of Russia's LNG production originates from Novatek's Yamal and Arctic LNG 2 projects, while Gazprom's Sakhalin-2 supplies an additional 30%. Analysts cite Ukraine's intelligence service, stating that current cargoes are transported by 11 vessels, with an average age of 10 years. Russia's oil shadow fleet comprises over 1,000 vessels, whereas constructing a comparable LNG fleet poses significant challenges due to the need for specialized cryogenic technology and the high cost of modern carriers, reaching up to $300 million.

Over the past six months, Russia's LNG shadow fleet has reportedly grown by at least eight used carriers and two newly built vessels, with most registered to entities in Dubai, Hong Kong, and Singapore. The intelligence service estimates that Russia's LNG shadow fleet reached 25 vessels in 2026, including Kosmos, Orion, Merkuriy, Luch, Arctic Express, Avacha, Chaivo, Aleksey Kosygin, and Konstantin Posiet.

Zvezda is currently constructing four more LNG carriers. However, sanctions are impeding the expansion of Russia's LNG shipping capacity, as six completed Arc7 ice-class LNG carriers remain blocked at South Korea's Hanwha Ocean shipyard. Ukraine's Foreign Intelligence Service asserts that the shadow fleet will only partially counterbalance the effects of the EU embargo, with Russia facing difficulties redirecting LNG exports to Asia due to limited suitable vessels, seasonal Arctic navigation restrictions, and a shortage of ice-class LNG carriers.

Upon the full implementation of the EU ban, Novatek may be compelled to accumulate unsold LNG, decrease production, or sell cargoes at substantial discounts, potentially strengthening China and other Asian buyers' negotiating positions.