Sanctions squeezing Sibur's supply of tankers for Ust-Luga LPG

(Reuters) - Russia's largest petrochemical company and exporter of LPG Sibur is reducing LPG exports from the Baltic Sea port of Ust-Luga due to shortages of gas tankers amid sanctions, two industry sources told Reuters on Friday.

The cuts in supplies further undermine Russian fuel exports, which have already been rocked by fires and drone attacks, including at the port.

LPG exports from Ust-Luga have already declined in January to around 50,000 metric tons from 67,000 tons on average each month last year, LSEG ship-tracking data showed.

According to financial disclosure by Navigator Gas, Sibur's time charter contract with the firm for two gas carriers, Navigator Leo and Navigator Libra, expired in December 2023.

Ship-tracking data from LSEG showed that those two tankers shipped up to 40% of total LPG exports from Ust-Luga, where Sibur is the single supplier of LPG to the exporting terminal at the port.

"If Sibur doesn't find the replacement for Navigator Gas' tankers, it risks to significantly cut transhipment at Ust-Luga," one of the sources said.

Another source said it would be hard for Sibur to find other ice-class tankers due to European Union and U.S. sanctions over the conflict in Ukraine.

Sibur declined to comment.

The EU Council last month adopted a 12th package of sanctions against Russia over Ukraine, introducing a new LPG import ban.

Sibur raised LPG exports from Ust-Luga in 2023 by 8% to 806,000 tons, continuing to divert supplies away from Europe to Africa, the Middle East and Asia Pacific.

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