Day: July 1, 2024

At 3 a.m., officials opened a newly installed gate at a station placed just over halfway up the 3,776-meter (12,388-ft) peak that is a symbol of Japan and a magnet for tourists, now swarming into the country at a record pace.

Climbers must pay 2,000 yen ($12) and their numbers will be limited to 4,000 a day after complaints of litter, pollution, and dangerously crowded trails flowed in last year.

“I think Mount Fuji will be very happy if everyone is more conscious about the environment and things like taking rubbish home with them,” said Sachiko Kan, 61, who was one of about 1,200 hikers gathered on the first day of the new measures.

The yen’s slide to a 38-year low has made Japan an irresistible bargain for overseas visitors.

They are injecting record sums into national coffers but are also putting strains on facilities for travel and hospitality, not to mention the patience of locals.

Hordes of tourists became a traffic hazard at a nearby photography spot where Mount Fuji appeared to float over a convenience store, driving officials to put up a barrier of black mesh to obstruct the view that had gone viral online.

The climbing season this year on Mount Fuji, which straddles the prefectures of Yamanashi and Shizuoka about 136 km (85 miles) from Tokyo, runs until September 10, after which the weather gets too cold and snowy.

A still active stratovolcano whose last eruption was in 1707, Mount Fuji has been a site of Shinto and Buddhist worship for centuries. 

The number of climbers recovered to pre-pandemic levels last year, with about 300,000 annually, the environment ministry says. Hikers typically start in the wee hours to make it to the top in time for sunrise.

For their money, climbers receive a wristband giving access to the trail between 3 a.m. and 4 p.m, excluding those with reservations for mountain huts closer to the peak, to whom the daily limit on visitors will not apply, authorities say.

The new trail curbs were necessary to prevent accidents and incidents of altitude sickness, particularly among foreign “bullet climbers”, or those racing to the top, Yamanashi governor Kotaro Nagasaki said last month.

Japan should focus on attracting “higher spending visitors” over sheer numbers of people, he told a press conference.

Geoffrey Kula, one overseas climber waiting to scale Mount Fuji on opening day, took the restrictions in stride. 

“This is not Disneyland,” said Kula, a visitor from Boston. “Having some sort of access control system to limit the amount of potential chaos is good.” 

By Peter Fabricius 

Fourteen months after Sudan’s civil war began, thecountry faces humanitarian disaster. At least 16000 Sudanese have died in the military power struggle that erupted in April 2023 when General Mohamed Hamdan ‘Hemedti’ Dagalo’s Rapid Support Forces (RSF) attacked General Abdel Fattah al-Burhan’s regular Sudanese Armed Forces (SAF).

The African Union’s Peace and Security Council (AU PSC) on 21 Juneexpressed‘grave concern over the unprecedented catastrophic humanitarian situation, indiscriminate killings of … civilians, and … destruction of infrastructure, including hospitals, schools, water purification and electricity generation plants.’

The warfare has included mindless cruelty, including mass rape and ethnic pogroms by the RSF, particularly in Darfur’s western region.

But the gathering famine is now most worrying. The war has displaced nearly 10 million people, destroyed agricultural infrastructure and collapsed the country’s economy. The WFPsaysnearly 18 million Sudanese face ‘acute food insecurity’ –almost five million of whom are in ‘emergency levels of hunger.’

The war has raged across the country, with the SAF dominant in the east and RSF in the west, including Darfur. In its previous incarnation as the Janjaweed, RSF rampaged, killed, looted and raped in Darfur in the early 2000s. The current epicentre of the clashes is El Fasher, capital of North Darfur and the last SAF stronghold in the area. Although SAF is supported by militias, the RSF has besieged the city.

‘The El Fasher area hosts over a million civilians, many … already displaced by the conflict and teetering on the edge of survival,’saysthe International Crisis Group (ICG). ‘Even a prolonged siege threatens their lives, but an escalating battle for the city could lead to mass slaughter and other atrocities.’

The SAF and RSF have been denying almost all humanitarian access to each other’s strongholds

The most pressing need is to deliver humanitarian aid to the millions who risk starvation – but even that is proving almost impossible. As several commentators have pointed out, both the SAF and RSF have denied virtually all humanitarian access to each other’s strongholds. The ICG says the RSF should allow civilians to leave El Fasher safely, although these people have nowhere to go, since most belong to ethnic groups the RSF has targeted.

InForeign Affairslast week, World Peace Foundation Executive Director and Sudan expert Alex de Waalwrotethat the looming famine is no accident: both Burhan and Hemedti are using mass starvation as a weapon of war.

‘The RSF fighters operate like human locusts, stripping cities and countryside bare of all movable resources … to sustain their war machine. The SAF … has blocked humanitarian aid to the vast areas of the country under RSF control.’ De Waal says by one projection, as much as 5% of Sudan’s population could die of starvation by year end.

The international community is protesting but achieving little to end the war or ensure emergency aid reaches the neediest. Early on, the United States and Saudi Arabia convenedtalksbetween the two sides, culminating in an agreement to allow humanitarian aid and protect civilians. Neither side has complied.

This month, the United Nations Security Council adopted Resolution2736, demanding civilian protection and unimpeded humanitarian access, an immediate cessation of hostilities, and an end to the El Fasher siege and external interference. The G7 has said much the same.

A question mark hangs over Africa’s peace efforts, because of foreign forces’ meddling in the conflict

The AU has made someattempts, but not enough, including futile efforts last year to bring the parties to the negotiation table. Last Friday, as El Fasher’s looming catastrophe became unignorable, the PSC again called on both sides to begin peace talks and at least allow humanitarian aid into the war zones.

It commended efforts by AU Commission Chairperson Moussa Faki Mahamat, the AU High-Level Panel on Sudan and the Intergovernmental Authority on Development to convene next month’s all-inclusive Sudan political dialogue process in Addis Ababa. The PSC directed Mahamat to set up a committee comprising a leader from each of Africa’s five regions to urge Burhan and Hemedti to meet face-to-face to resolve this ultimately personal power struggle between them.

However, a big question mark hangs over any peace efforts by Africa alone, because of foreign forces’ unprecedented meddling in the conflict.

The fingers of suspicion point mainly towards the Gulf. The United Arab Emirates (UAE) is widely suspected of arming and funding the RSF, while Saudi Arabia is believed to be backing the SAF. De Waal says this includes permitting Egypt, Qatar and Turkey to provide it with weapons and block peace initiatives. Last year Iran sent drones to the SAF as part of efforts to revive its links with Sudan’s Islamists, who support the SAF, he says.

Meanwhile, Russia seems to be playing both sides. Wagner has been involved in Sudan for years,backingthe RSF. But Moscow recently shifted to a more even-handed posture as it wants to establish a naval facility in Port Sudan (where Burhan’s government has retreated) in exchange for arms to the SAF.

De Waal believes only Saudi Arabia and UAE can bring Burhan and Hemedti to talks. Like the ICG, he has urged Washington and the West to use their influence on the two Gulf states to do that.

BRICS now includes Saudi Arabia, the UAE, Egypt, Iran and Russia – all suspected of meddling in Sudan

However, there is another locus of pressure on Saudi Arabia, the UAE and other interferers. The BRICS bloc now includes Saudi Arabia, the UAE, Egypt, Iran and Russia – all suspected of meddling in Sudan. Yet when its foreign ministers met in Russia this month, they allintonedthe mantra of ‘African solutions for African problems’ regarding Sudan – saying nothing about their own complicity.

Conversely, the ICG found it encouraging that in last week’s PSC communiqué, the AU condemned external actors for the first time – even if it didn’t name them.

Sudan’s beleaguered democrats could also still play a role. The Coordination Body of Civilian Democratic Forces (Taqaddum), comprising Sudanese civil society and political actors, held its founding conference in May. It brought together nearly 600 participants from Sudan’s 18 states and elected former prime minister Abdalla Hamdok as its leader.

As Chatham Housenotes, Taqaddum has been accused by both warring sides of bias towards the other, and must remain united and strong so it can contribute to peace efforts. Taqaddum probably remains hostage to Burhan and Hemedti’s reckless ambitions. But its conference was a useful reminder that neither of the two leaders destroying the country for their own gain would be the rightful heir were peace achieved.

They joined forces in October 2021 to hijack the transition to civilian democracy, and neither deserves a role in Sudan’s future.

• About the author: Peter Fabricius is a Consultant, ISS Pretoria
• Source: This article was published at ISS Today

This paper explores the impact of Western sanctions on Russia’s development of Liquified Natural Gas (LNG) in the Arctic. Sanctions aimed at restricting the purchase and construction of icebreaking LNG tankers appear to be particularly effective in delaying the entry into operation of the flagship Arctic LNG 2 project.

By Ignacio Urbasos Arbeloa

Novatek’s Arctic LNG 2 project faces significant delays due to Western sanctions targeting ship construction and procurement. These sanctions have proved to be successful in restricting the delivery of specialised icebreaking LNG carriers, delaying the project’s first shipments initially set for early 2024 and creating uncertainty about its viability. The analysis concludes that a coordinated G7 sanctions policy focused on blocking technology transfer, access to finance and, especially, acquiring transport and logistical capabilities could further derail the project.

Analysis

Despite the barrage of Western sanctions, Russia’s war economy has shown resilience to sustain an expensive conflict. One of the main victims of this geoeconomic war has been pipeline gas exports to the EU, currently at historic lows and expected to decrease further in the future when the transit contract through Ukraine expires on 31 December 2024. Russia holds the world’s largest share of natural gas reserves (at around 20%), but without its traditional European market it becomes more difficult to turn this geological gift into revenue. Its main potential market, China, is far away for pipeline development (the long awaited Power of Siberia II), a project that could take a decade to complete, with a very complex financing and negotiation scheme. LNG, therefore, has been identified by the Kremlin as a strategic opportunity to export Russian gas to non-European markets.

Since 2009 Russia has exported LNG from Sakhalin-2 in the Far East. The project, now controlled by Gazprom, was developed at the start of the century with technology and know-how from an international consortium led by Shell and subsequently acquired (under political pressure) by Gazprom.[1] Because it was already planned and built when Gazprom took control of Sakhalin-2, it has never been considered fully Russian and the project development did not create substantive domestic capacities associated with LNG technologies. Despite Gazprom’s efforts to expand its activities in the LNG sector, its many failures and delays led the Russian Government to decide to liberalise this sector in 2012, allowing Novatek and Rosneft to develop new LNG projects. With the success of Yamal LNG, Novatek, a private company with close ties to the Kremlin,[2] has been the only national player capable of developing a large-scale LNG project in Russia, breaking Gazprom’s monopoly over natural gas exports.

President Vladimir Putin highlighted the strategic importance for Russia of Yamal LNG during its ceremonial opening in 2017 when he 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. This is where the largest mineral reserves are located. This is the site of a future transport artery: the Northern Sea Route.’[3] The Northern Sea Route is a shipping lane along Russia’s Arctic coast, stretching from the Kara Sea in the west to the Bering Strait in the east, which has become increasingly navigable as climate change has reduced the Arctic ice cover. It offers a shorter journey between Europe and Asia than traditional routes and avoids critical choke points such as the Danish Straits, Bab el-Mandeb or Malacca. Therefore, for Russia, LNG in the Arctic represents more than just new gas exports. Geopolitically, Novatek’s projects are instrumental in developing the strategic Northern Sea Route, enabling Russia to shift its natural gas exports from the lost European market towards Asia.

The Yamal project is an engineering feat that made the first-ever export of LNG from the Arctic possible. For this purpose, the Yamal LNG consortium commissioned the construction of the first-of-its-kind icebreaker LNG tankers in 2014 that were successfully delivered in 2019. After the success of Yamal and with the support of the Russian Government, Novatek embarked on building a second Arctic project in 2017 known as Arctic LNG 2. The project is at a very advanced stage of development, but due to sanctions, difficulties in procuring new icebreaking LNG tankers and other critical technologies are preventing it from coming on stream. The timeline for the first LNG shipments of Arctic LNG2, initially set for early 2024, has been pushed back, creating uncertainty about the project’s full operational capacity and commercial viability.

Screenshot

Western sanctions on the Russian energy sector are wide-ranging, but the most effective to date appear to be those focused on limiting Novatek’s growth in the LNG sector. Those aimed at preventing Novatek from acquiring new icebreaker LNG carriers for its nearly completed Arctic LNG-2 project are a prime example of the coercive capacity of this mechanism. Sanctions are a double-edged sword that, to be successful, require inflicting more damage on the target of the sanctions (in this case Russia) than the issuer of the restrictions (the US and the EU). Sanctions on Russian new LNG development are a good example of such an approach because, without affecting the EU’s security of supply or the stability of international gas markets, they impose a high cost on the commercial outlook of the Russian gas sector.

1. LNG logistics in the Arctic

From November to June, during the winter season, LNG exported from the Arctic (where Russia holds most of its unexploited vast natural gas reserves) needs to use special ice-breaking LNG carriers to access international markets. The Yamal LNG project was the first and, as of today, the only project in the world to employ this type of vessel to export its natural gas. The project was led by Novatek (50.1%) in a consortium formed together with TotalEnergies (20%) and the Chinese CNPC (20%) and Silk Road Fund (9.9%). It reached Final Investment Decision (FID) in late 2013, a few months before the Euromaidan and the pro-Russian protest in eastern Ukraine, which eventually led to the Russian-Ukrainian war. The project advanced despiteUS sanctionsrestricting Novatek’s access to Western financial markets in 2014 thanks to aUS$12 billion loaninjection from the Export-Import Bank of China and the China Development Bank in 2016. This has been a common mechanism in Russia’s recent LNG expansion: when sanctions prevent the arrival of Western capital or technology, China steps in to fill the gap.

The success of the project was to overcome a new barrier in natural gas logistics, demonstrating the economic viability of developing these activities in the most extreme conditions. The port where Yamal LNG is located, Sabetta, is inaccessible to conventional ships during winter months as it is surrounded by icy waters that prevent safe navigation. For the realisation of the project, Hanwha Ocean Shipping, formerly known as Daewoo Shipbuilding & Marine Engineering (DSME), was commissioned to build 15 icebreaking vessels, the first in the world, at a cost of US$320 million each. The 15-vessel fleet valued at US$4.8 billion, is today responsible for exporting Yamal-produced LNG to European and Asian markets. These vessels are owned and operated by four shipowners: Sovcomflot,[4] Teekay (in partnership with China LNG Shipping), Dynagas and MOL LNG (in partnership with China Shipping Group) (see Figure 2).

Figure 2. Fleet profile of the 15 active icebreaking LNG carriers in the world

Source: the author based on available open sources.

To optimise the voyages of these specialised ships, the natural gas they carry is transferred to conventional LNG carriers in warm-water ports. These transshipment services, essential for Russian LNG logistics, occur mainly in Zeebrugge (Belgium) and Montoir-de-Bretagne (France). In winter, permanent darkness and ice in the Arctic Ocean make it impossible for LNG carriers, even icebreakers, to travel in an eastward direction to reach Asian markets through the Bering Strait. This forces shipments to be re-routed through European ports servicing LNG from Yamal if they want to reach Asian markets.

Unlike crude oil transshipments, the technical specification of LNG transshipment operations means that they must be carried out in specialised ports. Russia has built two floating terminals to carry out these transshipments in national waters in Murmansk, on the western Arctic, and Kamchatka, on its eastern side, but US sanctions imposed on both projects in September 2023 have delayed their entry into full operation. The US sanctions target the company’s operating the Murmansk and Kamchatka floating terminals, Arctic Transshipment LLC,[5] which has halted the mostly Western LNG carrier operators from delivering or picking up LNG from the terminals. The EU is also likely to ban such services in European ports as part of the forthcoming 14^th round of sanctions on Russia.

2. Sanctions and the LNG industry

Most LNG carrier owners and operators are companies with a good reputation that depend on their image for their commercial success. LNG vessels are valuable assets that can only operate under strict technical specifications, which limits their operability to a small number of ports. This creates a profound vulnerability for LNG exporters to US sanctions. Making use of the centrality of the US in the global economy, the White House can impose ‘secondary sanctions’ on foreign firms, which are forced to choose between trading with US sanctions targets or forfeiting access to the US financial system. Secondary sanctions go beyond targeting the primary sanctioned country or entity. Instead, they focus on third-party individuals, businesses or countries that conduct business with the primary sanctioned entity, in this case, Yamal LNG 2. The goal of these secondary sanctions is to further isolate the targeted country or entity by creating a broader deterrent effect that includes non-US actors.

As a small market (there are roughly 7.500 oil tankers compared with772 vessels in the LNG industry), companies operating in this market cannot afford to be sanctioned and excluded from the US financial system. Most shipyards, LNG tanker owners, insurance companies and LNG terminals are operated by Western or internationally embedded companies. This explains why Iran, a country proficient in sanctions evasion and oil smuggling with enough in-house engineering capacities, has not been able to successfully develop LNG export projects, despite sharing the huge gas field South Pars/North Dome from where QatarEnergies exports around 20% of the world’s LNG. This reality stands in stark contrast to the crude oil trade, which has shown a remarkable ability to effectively circumvent the sanctions and restrictions recently imposed on Russia, Iran and Venezuela by the US and the G7. LNG is therefore a fertile ground for the imposition of sanctions as it is a small transparent market with few service providers and a very specific technology.

3. US sanctions on Russian Arctic LNG 2

After the success of Yamal and with the support of the Russian government, Novatek embarked on building a second Arctic project in 2017 known as Arctic LNG 2. The Arctic LNG 2 Project, located on the Gydan Peninsula, is a major natural gas upstream initiative led by Novatek with an initial total cost of more thanUS$20 billion, with TotalEnergies, the Chinese CNPC and CNOOC, and the Japanese Mitsui and JOGMEC (10% each) as international partners. The project is designed to export 27 bcm of LNG annually, becoming the largest LNG project in Russia, doubling Novatek’s export capacity when fully completed (see Figure 1).

The first US sanctions affecting Russian LNG development were imposed in 2014 following Russia’s annexation of Crimea. These sanctions targeted Novatek’s access to Western financial markets and were part of broader measures targeting Russia’s financial, energy and defence sectors. They restricted entities from providing services or technology to support Russia’s energy exploration or production in Arctic offshore and deepwater. In April 2022 the EU also included a ban on the transfer of key liquefaction technologies to Russia in itsfifth sanction round.

For the Arctic LNG 2 project, the first specific sanctions were imposed in September 2023, aiming to restrict the project’s development by targeting Russian engineering firms and their subsidiaries involved in the project, as well as firms from third countries attempting to circumvent these restrictions. These sanctions also included the two Arctic transshipment vessels designed to offer these services in Russian waters to optimise ice-breaker services in Murmansk and Kamchatka and avoid the reliance of these operations on EU ports. As of today, these two transshipment platforms remain idle.

In November 2023 sanctions directly targeted the company behind the Arctic LNG 2 project, implementing comprehensive restrictions on dealings with the company by US persons and entities, and potentially by non-US entities due to secondary sanctions risks, increasing the pressure on technology procurement for the project. In February 2024 the US started to focus its sanctions on the procurement of new LNG ice-breakers tankers made in Russia by Novatek when it included the Zvezda shipyard as a sanctioned entity. The US Treasury also included in the sanctions list the Russian tanker operator Sovcomflot andSun Ship Management, a Dubai-based front company to which Sovcomflot had transferred a large part of its fleet, including LNG tankers.

4. Sinking the fleet: preventing Russia from acquiring icebreaking LNG carriers

For its next big project, Arctic LNG 2, Novatek and its project partners had placed orders for 15 Arc7[6] LNG carriers to be built at the Zvezda shipyard in Russia and for six more at Korea’s Daewoo Hanwha shipyards. These icebreakers are an improvement over the previous design. According to Vitaly Yermakov, these upgraded Arc7s for Arctic LNG 2 are expected to have improved capabilities to move independently through the ice. With these new vessels, the Northern Sea Route to Asia was anticipated to be open for a longer period of time, reducing Novatek’s dependence on the European market for most of the year. Despite the previous success of Hanwha Ocean shipyards, Novatek opted for the construction of icebreakers on Russian soil. Political pressures to develop the value chain in Russia and a subsidy scheme on the cost overrun of the vessels compared with the Korean offer would explain this riskier decision.

In Russia, Novatek planned to build 15 Arc7 Ice-Class at the shipyard of Zvezda, supported technologically by Samsung, and with the involvement of other European companies such asGTT, for the gas membranes, andMANandWärtsiläfor the propulsion systems. However, due toUS and EU sanctionsthese firms stopped servicing the shipyard and left the project gradually from 2022. The exact status of the LNG tankers is unknown, butHigh North Newsindicate that two of the vessels were close to completion by the time Western firms left and might be already in the water pending some final work. The other three tankers under construction lack critical technology (membrane and storage devices) and there are doubts as to whether they will be able to become operational without technological assistance from third parties. The other 10 ships initially planned for construction at Zvezda are, in the current geopolitical and sanctions context, a near-impossible mission.

To try to solve this issue,Novatek has sent 200 skilled personnelto the Zvezda Shipyard to try to materialise the delivery of the most advanced first two Arc7 LNG carriers.Currently there are no manufacturers of membrane cargo containment systems for LNG tankerson the Russian market, despite the Kremlin’s efforts to achieve import substitution of key technologies used in the oil and gas sectors. According toHigh North News, if Novatek succeeds in getting the first two icebreakers up and running, it could export around 2.8 bcm of LNG per year, a fraction of the 9 bcm of the train 1 project capacity and the 27 bcm of the entire project. With the help of conventional LNG carriers during summer and the use of the sanctioned transhipment terminals at Murmansk and Kamchatka, this figure could be higher. Novatek should, in any case, find new buyers willing to assume the risks of sanctions after thedeclaration of force majeureof Arctic LNG 2 offtake contracts in December 2023. Potential alternative buyers, presumably Chinese, would face the risk of secondary US sanctions and foreclosure from the rest of the global financial market. Without a US Treasury waiver, which is highly unlikely, the leading Chinese LNG players (Sinopec, PetroChina, CNOOC and Jovo Energy) would not be able to become involved in the project without developing opaque innovative mechanisms through front companies.

The stalling of this construction is particularly painful for Russian ambitions in the Arctic. These ‘made in Russia’ ships were to be operated by the state-owned company Sovcomflot. The success of their construction allowed for the development of domestic capacities from construction, operation and marketing of LNG in the Arctic, thus serving Russian interests of pivoting its gas exports from the EU to Asia and dominating the Northern Route. The disruption of Korean cooperation seems critical.Russia saw South Koreaas a temporary technology supplier that would eventually end up ensuring the development of domestic capabilities and self-sufficiency in LNG tanker construction. Samsung’s exit from Zvezda would have come too soon to affect the technology transfer that was expected from this partnership.

For the six remaining Arc7 LNG carriers being built at Korea’s Hanwha Ocean shipyards, even though three of them are already built, sanctions have blocked their transfer to its operators, Sovcomflot and Japan’s MOL LNG. The question now is what the future of the icebreakers will be. In principle, Hanwha Ocean will struggle to find an alternative to the Russian market. As LNG icebreakers, their fuel consumption is much higher than that of conventional ships and up to50% more expensive. Hanwha has expressed its discomfort with these sanctions, and although constrained to comply with them, unsuccessfully attempted to transfer the icebreakers to an unsanctioned front company in the United Arab Emirates in February 2024. Since there are no other LNG projects with demand for these type of vessel in the world, Hanwha and MOL LNG are already studying how they could be converted into Floating Storage and Regasification Units (FSRUs) in other markets if thetransfer to Russia remains blocked. Coordination with the South Korean government for the success of sanctions is key in light of the critical involvement of its companies in the entire Russian LNG value chain in the Arctic.

Figure 3. Status of ice-breaker LNG vessels orders

Source: the author based on available open sources.

Conclusions

The time is now for maximum pressure on Arctic LNG2 progress

Novatek’s Arctic LNG 2 project faces significant delays due to recent Western sanctions targeting ship construction and operations at critical shipyards. These sanctions have impacted the Zvezda shipyard in Russia and indirectly the South Korean Hanwha Ocean facilities, restricting their ability to deliver specialised icebreaking LNG carriers essential for the project’s Arctic operations. Consequently, the timeline for the first LNG shipments, initially set for early 2024, has been pushed back, creating uncertainty about the project’s full operational capacity and commercial viability.

These sanctions delay the start-up of the project and expose Russia’s weakness in the LNG market. They impose a significant financial and reputational cost on the rising star and leading company in the sector, Novatek, and consequently on Russia’s growth outlook in the LNG segment. Before Russia successfully develops its technological and logistical capabilities in the Arctic, it is time now for the G7 to implement a coordinated policy of sanctions on Russia’s gas development in the region. Sanctions should focus on blocking technology transfer, access to finance and, especially, acquiring transport and logistical capabilities. A maximum pressure strategy could derail the Arctic LNG 2 project and make it financially unviable, at least in the short term. Icebreaker procurement seems to be one of Russia’s weak spots, and energy sanctions should continue to be targeted in that direction.

• About the author: Ignacio Urbasos Arbeloa is an Analyst in the Energy and Climate Programme at the Elcano Royal Institute. He was part of the Energy and Climate Centre at the Institut Français de Relations Internationales (IFRI) where he developed his research on the investment strategies in the European electricity sector and energy policy in Latin America.
• Source: This article was published by Elcano Royal Institute

[1] Although the Sakhalin-2 project was initially developed during the 1990s by an international consortium without the participation of Russian companies, the paralysis of the project due to administrative obstacles to the approval of environmental licences forced the entrance of Gazprom as a majority shareholder of the consortium in 2006. Following the Russian invasion of Ukraine in February 2022, Shell decided to give up its remaining 20% share in the project.

[2] Novatek’s shareholder structure includes the Russian oligarchs Leonid Mikhelson (24.76%) and Gennady Timchenko (23.49%), the French TotalEnergies (19.4%), Gazprom (9.99%) and other investors (22.36%). In 2022 TotalEnergies attempted to sell its stake in Novatek but was blocked due to sanctions.

[3] Vladimir Putin at Yamal LNG’s inauguration speech on 2 December 2017 at Sabetta.

[4] Due to sanctions, Sovconflot transferred to Dubai based Sunship Mgmt its ice-breaking LNG tanker. It later transferred it again to Gas Carriers Scf, both front companies based in the UAE.

[5] Arctic Transshipment LLC is a subsidiary of Novatek with a 10% participation by TotalEnergies.

[6] Arc7 Ice-Class LNG tankers are specialised vessels designed to transport liquefied natural gas through extremely harsh Arctic conditions, capable of navigating independently through ice up to 2.1 metres thick.

By Wanning Sun and Marina Yue Zhang

TikTok is one of themost downloaded and used appsamong young people in the United States. But despite its popularity, the US Congress’ decision to force TikTok tosell or face a banis just the latest move against the app. TikTokfiled a lawsuitin response, claiming that the law violated the First Amendment of the US Constitution. But whether the app can win this battle remains uncertain.

While TikTok’s user base continues to grow, it appears that the app may be in danger of losing the public relations battle. Alate 2023 pollfound that nearly 40 per cent of Americans favour a government ban on TikTok despite around 60 per cent of US respondents being active users of the app. Anotherpoll revealedthat 59 per cent of Australians support a nationwide ban on TikTok.

The most cited rationale behind the US government’s decision to force TikTok’s sale or ban is thenational security concern. Lawmakers have voiced apprehension over the platform’s data handling practices, fearing that sensitive user information could be accessed and exploited by foreign entities — particularly the Chinese government. They also point to China’s national security laws, which give the Chinese government the power to demand data from private companies and individual users for the purposes of intelligence gathering.

While the media consistently gives voice to such concerns, to date no publicly available evidence points to the Chinese government spying on people using TikTok.

Aparallel tropein media is that TikTok is a vehicle for CCP propaganda. Lawmakers fear that the app is exposing millions of young Americans to the Chinese government’s malign influence. The media frequently cites TikTok critics such asRepublican Senator Jim Risch, who described TikTok as an ‘indoctrination machine’ that renders ‘our kids and grandkids particularly vulnerable to falling under the manipulation of the Chinese Communist Party’.

These security and ideological concerns obscure the fact that TikTok has become both a catalyst and a metaphor for the tech rivalry between the United States and China.

TikTok has a clear advantage over US tech companies. Its algorithm shares similarities with Douyin, itsChinese counterpart.ByteDance, which owns both TikTok and Douyin, employs a large workforce in China to manually tag and annotate content, which has given it an edge in developing highly refined algorithms. TikTok’s advanced algorithm, user engagement strategies and unique content format have allowed it to outpace many US social media platforms.

Forced divestiture of TikTok from ByteDance would have broader economic repercussions, including potential job losses, a significant impact on ByteDance’s global valuation and a dangerous precedent for other Chinese tech companies in the United States, potentiallydeepening the tech dividebetween the United States and China.

As the 2024 election approaches, TikTok has become a litmus test for which party is better equipped to deal with China. Given current geopolitical tensions, playing the ‘tough on China’ card is the safest political strategy for both parties. It is understandable why more hawkish Republican politicians want to ban TikTok, as the platform is mostly popular among younger users who are believed to favour incumbent US President Joe Biden and his Democratic Party, whereas Biden may be acutely aware that he cannot afford to be wedged by his opponents on China.

In most US media coverage, readers are told that the Chinese government could leverage TikTok’s reach and influence to shape narratives, sway public opinion and potentially undermine US interests. But TikTok has become a powerful platform for shaping younger voters’ views and attitudes on a wide range of social and political issues, many of which are incompatible with — and therefore challenge or even threaten — the interests of the political establishment.

Examples of TikTok’s use as a political tool include TikToks mocking President Biden’s limited student debt relief plan and TikToks critiquing the Democratic Party’spolicieson abortion rights. Young TikTok creators on theRepublican sideutilised the platform to challenge the Republican Party’s stances on LGBTQ+ rights, immigration and climate change.

The platform has also supported grassroots activism advocacy for thepro-Palestiniancause. While Metahas been accused of favouringpro-Israel content, one study of TikTok found more pro-Palestine than pro-Israel posts, leading politicians on both sides to see TikTok as a potential threat to established narratives. #TikTokBan has becomea forum for creatorsto critique the bipartisan push to ban the app over data privacy concerns. Many argue that the proposed ban is hypocritical given the extensive data collection practices of US tech companies.

The US Congress’ bipartisan decision hasreverberated in Australia, where it has become a point of difference between the major political parties. Coalition Shadow Minister for Home Affairs James Paterson hasargued in favourof following the US lead, while the AustralianLaborParty has made it clear that it has no intention to do so.

If Australia does follow the United States on this issue, it may damage Australia–China relations. But a TikTok ban in Australia now seems even less likely. During the June 2024 visit of China’s Premier Li Qiang to Australia, Opposition Leader Peter Dutton, well-known for his hawkish position on China,signalledthat he has now softened his stance. This change makes it somewhat safe to predict that, unlike in the United States, TikTok will not become a key issue in the 2025 Australian election, even if TikTok ends up being banned in the United States.

About the authors:

• Wanning Sun is Professor of Media and Cultural Studies at The University of Technology Sydney. She also serves as the Deputy Director of the UTS Australia–China Relations Institute.
• Marina Yue Zhang is Associate Professor at the Australia–China Relations Institute, The University of Technology Sydney.

Source: This article was published by East Asia Forum