Questions viability, effectiveness of sanctions against Russian company Novatek after it sends gas shipment to Massachusetts

Washington (February 9, 2018) – Senator Edward J. Markey (D-Mass.), a member of the Foreign Relations Committee, this week sent a letter to the Departments of State and Treasury querying the agencies about potential evasion of U.S. sanctions by Russian companies. Specifically, Boston Harbor recently received a shipment of liquefied natural gas (LNG) that contained gas from Novatek, a U.S.-sanctioned Russian natural gas producer. The United States imposed broad-based sanctions in 2014 on Russia in response to its ongoing occupation of Crimea and destabilization of eastern Ukraine. Despite these sanctions, Novatek shipped gas partially sourced from Yamal LNG, Novatek’s LNG export facility, to Everett, Massachusetts, potentially evading sanctions by generating revenue from U.S. sales. Another shipment from Novatek to the United States is expected in the coming weeks.

“Although a gas purchase from Yamal LNG many not constitute financing as defined as under the sanctions, the purchase provides revenue to Novatek,” writes Senator Markey in his letter to Secretaries Rex Tillerson and Steven Mnuchin. “This shipment may therefore circumvent the U.S. sanctions and calls into question to what degree those sanctions are serving our broader foreign policy goals regarding Russia or require adjustment to better achieve those goals.”

A copy of Senator Markey’s letter can be found HERE.

In his letter, Senator Markey specifically asks if the most recent shipment of LNG to Everett by Novatek violates either the letter or spirit of the 2014 sanctions. He also asks if the administration is aware of other sanctioned Russian companies engaging in similar transactions where financing is prohibited, as well as if the 2014 sanctions have been effective more broadly.

Senator Markey authored the Fuels Transportation Safety Amendments Act, a law that requires the Secretary of Energy to establish minimum standards for the location, construction, and operation of any new LNG facility. The law also required the Secretary of Energy to establish minimum safety standards for existing LNG facilities, and established civil and criminal penalties for the violation of safety or financial responsibility standards.

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