Sanctioned nuclear icebreakers helped export gas from the Russian Arctic bought by Shell

UK oil giant Shell has bought at least 350,000 tonnes of Russian gas in the past 13 months that was escorted through the Arctic circle using sanctioned nuclear icebreakers.

An Unearthed investigation identified five 70,000-tonne shipments of liquefied natural gas (LNG) purchased by Shell that were helped through a stretch of frozen Siberian waters by icebreaking vessels run by Atomflot.

This company, a subsidiary of Russia’s nuclear agency, has been sanctioned by the UK and US since May 2023, as part of their response to the Russian invasion of Ukraine.  

The EU, which imposed its own sanctions on Atomflot in February 2023, describes the company as “key” to Russia’s “Arctic hydrocarbon strategy” and a substantial contributor to the Russian government’s funds for war in Ukraine. 

The LNG shipments bought by Shell that Unearthed tracked were not part of efforts to maintain EU energy supplies, but rather appear to have been delivered by the company to customers in Asia and the Middle East. 

Other western companies have also purchased Russian gas exported with the help of Atomflot. Unearthed analysed a sample of 30 other shipments of Russian LNG brought to EU ports during the last ice season, and found that three-quarters of them had been escorted by sanctioned icebreakers. 

According to information held by the trade intelligence company Kpler, these shipments were destined for a range of European customers, including the French oil multinational TotalEnergies and Spanish gas company Naturgy, both of which hold contracts for millions of tonnes of gas a year from the Russian Arctic.

There is no suggestion that London-headquartered Shell or any other European companies purchasing LNG via this route have made direct payments to Atomflot, which would be a clear breach of sanctions. It appears likely that any fees due to Atomflot will have been paid by Yamal LNG, which ships the cargoes to Europe. 

However, the investigation reveals the vital role Atomflot’s fleet of nuclear-powered icebreakers has played in ensuring delivery of vast quantities of Russian LNG to western terminals. 

Lawyers and campaigners said these indirect links to a sanctioned entity could create legal and ethical risks for Shell and other European companies. 

The more [Putin] exports, the more Ukrainian soldiers and civilians die 
– Sir Bill Browder

“Any business arrangement that is contingent on the participation of a designated person is likely to be at very high risk of a breach of sanctions,” said Peter Caldwell, a barrister with expertise in sanctions at Doughty Street chambers.  

A breach would only take place if the company knew or could reasonably suspect that Atomflot was to receive a “significant financial benefit” from the use of the icebreakers.

Information as to what Atomflot charges for its icebreaking services is publicly available. The website of its parent company, Rosatom, has a fee calculator for the cost of icebreaker assistance, which suggests that it would charge around 40m rubles (£300,000) to accompany a shipment of the scale purchased by Shell.  

The sanctions campaigner and financier Sir Bill Browder said: “Putin’s murderous war in Ukraine has been sustained primarily by revenues from oil and gas exports. The more he exports, the more Ukrainian soldiers and civilians die.

“If companies are benefiting from the use of a sanctioned Russian icebreaker to move their LNG then as far as I’m concerned that’s a violation of the sanctions and should be punished.”

A spokesperson for Shell said: “We comply with all applicable sanctions and regulations.” Unearthed understands that the company has reviewed the information gathered for this investigation and does not believe it has breached sanctions.

A spokesperson for Naturgy said: “Naturgy has no contractual relationship whatsoever with third parties that are subject to sanctions from the EU.”

TotalEnergies did not respond to requests for comment. 

Shipping from the Arctic

The shipments received by Shell came from Yamal LNG, a Siberian facility majority-owned by Russian gas producer Novatek that can produce up to 16.5m tonnes of LNG each year for export to clients in Europe and Asia. 

In the winter and spring, however, the waters surrounding Yamal LNG become thick with ice. Tankers carrying gas from Yamal’s port, Sabetta, during the ice season often need help from Atomflot’s nuclear icebreakers to make it through. 

Unearthed used ship-tracking and trade databases to track five cargoes of LNG bought by Shell last winter and spring from Yamal LNG, which left Sabetta and sailed in convoy with Atomflot-operated icebreakers to reach open waters. 

In each of these cases, the tanker carrying Shell’s cargo was the only vessel sailing behind the icebreaker, indicating it was making exclusive use of the icebreaker’s services at the time. The cargoes were shipped to Montoir LNG terminal in Brittany, western France, then transferred onto Shell-chartered vessels for transport to Turkey, Kuwait or India.  

The tankers that brought the gas from Yamal to Montoir were chartered by Yamal LNG. There is therefore no evidence that Atomflot, the sanctioned company which provided icebreaking services for these tankers, had any direct relationship with Shell or any other recipient companies. 

Yamal LNG’s owner Novatek and Atomflot did not respond to questions when approached by Unearthed.

Russian hydrocarbons

When Vladimir Putin ordered the invasion of Ukraine in February 2022, the Russian operations of western energy giants came under intense scrutiny. British oil company BP almost immediately announced its full withdrawal from the country; ExxonMobil left in October 2022 after Putin seized its flagship Russian project. 

Shell announced that it would withdraw from all its joint ventures with Gazprom, which is part-owned by the Kremlin, sell its Russian petrol station business and end a swathe of other activity in the country.

In March 2022, after heavy criticism for buying a cargo of Russian crude oil at a discounted price, the company apologised and pledged to phase out “involvement in all Russian hydrocarbons”. As of July 2023, the company said it had ended almost all its purchases of oil and LNG, but “still [had] one remaining long-term contractual commitment in operation”. 

That contractual commitment is with Novatek, a Russian company, for the supply of 900,000 tonnes of gas from its Yamal LNG plant each year until 2041.  

Yamal LNG was a landmark project for Russia’s energy sector. The first gas facility within the Arctic circle, it sits on the remote Yamal peninsula in northwest Siberia, on the banks of the Gulf of Ob. 

The project was built by Novatek, Chinese state-owned oil and gas company CNPC, and TotalEnergies, the French energy company, which according to Reuters remains a 19.4% shareholder in Novatek and retains a 20% stake in Yamal LNG itself, despite efforts to unwind its Russian operations.  

Opening the 180-hectare site in 2017, Putin said: “This is perhaps the largest step forward in our development of the Arctic. Now we can safely say that Russia will expand through the Arctic this and next century.”

The project has been viewed as such a success that in 2019, TotalEnergies and Novatek announced they had started work on a second major gas plant, Arctic LNG 2, 70km away on the facing bank of the Gulf of Ob.  

Western energy companies including TotalEnergies, Shell and Naturgy signed huge deals to buy LNG from Yamal, data from Bloomberg NEF shows. TotalEnergies is currently contracted to receive 4m tonnes a year until 2032 and an additional 1m tonnes a year until 2041, while Naturgy’s contract is for 2.5m tonnes a year until 2038.  

Escalating sanctions

After the invasion of Ukraine, western governments sought to restrict Moscow’s vast income from its energy sector without suddenly cutting off European access to Russian oil and gas. 

These efforts included imposing a $60-a-barrel price cap on oil, sanctions on various players in the Russian energy industry, and a ban on imports of Russian LNG to the UK after January 2023. From March this year, the EU will also ban transshipments of Russian LNG to destinations beyond Europe. This will bring an end to the kind of re-exporting of Russian gas seen in the Shell shipments tracked by Unearthed, which were brought into EU ports then loaded onto new vessels to be sent on to customers in Asia and the Middle East.

Since Russia’s brutal invasion of Ukraine, Western oil firms have repeatedly undermined the spirit of sanctions
Mai Rosner, Global Witness

The EU has stopped short of an outright ban on imports of Russian gas. The country is the EU’s second-largest supplier of LNG, and the EU spends €2bn a month on Russian fossil fuels, according to a 2023 European Parliament resolution. Last month, ten EU nations called on the EU to “ban the import of Russian gas and LNG at the earliest date possible”, Reuters reported.

In February 2023, the EU expanded its sanctions on Russia’s energy sector, targeting shipping companies and reinsurers linked to exports of oil, as well as Atomflot. “Russia’s icebreaker fleet is key to the country’s Arctic hydrocarbon strategy,” the EU’s sanctions text explained, although it emphasised the role these vessels played in escorting tankers to Asia, rather than Europe.  

The UK and US followed suit in May 2023, with the UK describing Atomflot as “involved in obtaining a benefit from or supporting the Government of Russia”.

The sanctions have reportedly been effective at delaying the start of exports from Arctic 2 LNG, by hampering the delivery of further specialised icebreakers that the facility would need to start supplying clients.  

However, European companies including Shell have continued to take regular delivery of huge cargoes of LNG that have been escorted to open waters by sanctioned Atomflot icebreakers, en route to facilities in France, Spain and the Netherlands. 

“Western oil majors are central to multiple overlapping crises,” Mai Rosner, a fossil fuel campaigner at Global Witness, told Unearthed. “If they’re relying on a sanctioned company to break through Arctic ice – which is already melting because of emission-driven climate change – they have even more to answer for.

 “These companies spent decades building Russia into a fossil fuel superpower while ignoring Putin’s rising authoritarianism. And since Russia’s brutal invasion of Ukraine, Western oil firms have repeatedly undermined the spirit of sanctions,” Rosner added.

Tracking the vessels

Unearthed examined trade data from Kpler, a data provider on energy transactions, to identify 119 further cargoes of gas shipped from Yamal LNG to European ports including Montoir, Rotterdam in the Netherlands, Bilbao in Spain, and the Belgian port of Zeebrugge during last year’s ice season, which lasted from December until May.

Ship tracking of the LNG tankers reveals a common pattern: during the ice season, the tanker will be joined by an Atomflot icebreaker such as the Arktika or the 50 Let Pobedy (which translates as “50 Years of Victory”) between 20 and 60 miles outside the port of Sabetta. The two vessels then sail in close convoy through the Gulf of Ob, which at that time of year is frozen over, before the icebreaker peels away and the tanker heads into open waters. 

In one of the journeys tracked by Unearthed, a tanker named the Vladimir Voronin could be seen stopping in the Gulf of Ob for several hours. At one point an Atomflot icebreaker, the Taymyr, passed nearby with a separate LNG tanker following it. This presumably carved a channel through the ice, but the Vladimir Voronin did not move. 

Then the 50 Let Pobedy approached, and the Vladimir Voronin immediately swung in behind it, following its course closely until the icebreaker peeled off. No other ships were in the vicinity, indicating that the 50 Let Pobedy was exclusively helping the tanker. 

The Vladimir Voronin continued towards Montoir, where its cargo was reloaded onto a Shell-chartered vessel, the Paris Knutsen, destined for Kuwait.  

Unearthed identified five cargoes linked to Shell that appear to have relied on Atomflot’s icebreaking services between December 2023 and April 2024. 

Customs declarations, open-source reporting and ship tracking revealed that each of the cargoes was then transshipped at Montoir onto a Shell-chartered vessel, and delivered to a customer in India, Kuwait or Turkey. 

Given the scale of Shell’s contract to buy from Yamal LNG it is possible that the company bought further cargoes of gas for use within the EU that also relied on Atomflot escorts, but this cannot be confirmed using information in the public domain. 

Unearthed also identified dozens of further cargoes that were listed by Kpler as being bought by European clients, including TotalEnergies and Naturgy. In a sample of 30 of these shipments that Unearthed analysed from between December 2023 and May 2024, 23 were escorted by Atomflot-operated icebreakers to navigate the frozen Gulf of Ob.  

Economic resources

Atomflot charges for its icebreaking services, and therefore is likely to receive a financial benefit for its involvement in the shipments to Europe. This raises questions over whether Shell, as a UK-listed company, has breached British financial sanctions, according to Fergus Randolph KC, a barrister with expertise in financial sanctions at Brick Court chambers, who Unearthed commissioned to examine the legal position of the shipments. 

Companies and individuals are barred by Regulation 11 of the UK’s Russia financial sanctions package from dealing with the “economic resources” – a broad category that could include Atomflot’s icebreaking services – of sanctioned parties, if they know or should suspect about the sanctions. They are also barred by Regulation 13 of the same package from payments to third parties that they know, or should reasonably suspect, will benefit a sanctioned individual or company. 

Peter Caldwell, a barrister with expertise in sanctions at Doughty Street chambers, told Unearthed that Regulation 13 would be particularly relevant.

“If the premise is correct that funds have been made available for the benefit of Atomflot, then, depending on whether the parties were aware of this, that could be a breach of financial sanctions,” he said.

“The crucial evidential issue would be whether it was known or the carrier had reasonable cause to suspect that Atomflot was to receive a significant financial benefit for the use of the icebreakers.

“Any business arrangement that is contingent on the participation of a designated person is likely to be at very high risk of a breach of sanctions. Even where there is no direct payment to a [designated person], where it appears that their participation has necessarily been priced into the purchase costs, that might well give the buyer reasonable case for suspicion.”

If the courts or the Treasury’s sanctions regulator, the Office of Financial Sanctions Implementation (Ofsi), found that Shell had breached sanctions, this could be a criminal offence. Ofsi has imposed fines on 10 companies under the sanctions since 2016 and is understood to be investigating 318 further potential breaches. 

European companies are similarly blocked from transactions that would – directly or indirectly – make funds available to sanctioned entities, under Article 2 of the EU’s financial sanctions on Russia. It is down to individual member states to enforce EU sanctions. 

Shell said it complied with “all applicable sanctions and regulations.”

Naturgy said it had “no contractual relationship whatsoever with third parties that are subject to sanctions from the EU,” but did not respond when asked to comment on the suggestion that Atomflot could have received payment for escorting shipments of gas to Naturgy. 

TotalEnergies did not respond to a request for comment.

How we did it

Unearthed used contracts data from BloombergNEF to identify European companies that held large contracts for supply from Yamal LNG. We then used shipments data provided by trade intelligence company Kpler to identify cargoes delivered to Europe from Yamal LNG’s port of Sabetta. 

Using MarineTraffic, a database that tracks the movement of ships, Unearthed identified instances where LNG shipments destined for Europe had been assisted by Atomflot-operated icebreakers between December 2023 and May 2024, the period in which the icebreakers were most active. 

In cases where Kpler specified that a shipment had been bought by Shell, Unearthed corroborated this by using MarineTraffic to monitor the cargoes being transshipped at Montoir onto vessels that open-source reporting showed to be contracted or owned by Shell. In one case, a bill of lading on export data platform Panjiva showed that Shell had bought the shipment.

In cases where the final delivery destination of a cargo was a European port, there was less data available to corroborate the identity of the end-buyer. Kpler attributes almost all cargoes to Spain as being bought by Naturgy; whereas it attributes most cargoes sent to France as having several possible buyers. Out of those companies identified as potential end-buyers for the French shipments, TotalEnergies has the largest supply contract with Yamal LNG (5m tonnes a year). Unearthed tracked a sample of 30 shipments sent to Europe during the last ice season, and found that 77% had been assisted by Atomflot icebreakers. 

Unearthed provided all the energy companies named in this article with all the relevant data on the icebreaker-assisted cargoes we identified as actually or potentially delivered to them. TotalEnergies did not respond. Both Shell and Naturgy provided statements, but neither commented on the data provided.