Chinese State Enterprise Buys Wison’s Sanctioned Yard in Zhoushan
Chinese Firm Acquires Sanctioned Offshore Yard
A Chinese state-owned enterprise has acquired Zhoushan Wison Offshore Engineering, a unit of the Wison Group previously sanctioned by the Biden Administration. The sanctions were imposed due to Wison’s involvement in supporting Russia’s liquefied natural gas (LNG) export projects in the Arctic. This acquisition comes shortly after Wison pledged to divest from its Zhoushan unit in response to the sanctions.
Details of the Acquisition and Sanctions
The U.S. State Department sanctioned Wison for supplying power generation modules to Novatek’s Arctic LNG 2 project. This project is under heavy sanctions due to its ties to Russian energy initiatives. Wison’s modules were intended for installation on barge-based liquefaction trains at the Arctic LNG 2 site. After completion, the modules were shipped to the construction site through complex transshipment operations, which seemed designed to conceal the cargo’s movements. Two vessels involved in this operation, Hunter Star and Nan Feng Zhi Xing, had previously faced sanctions for their roles in Russian energy projects.
In response to the sanctions, Wison New Energies, the parent company, announced it would cease any new business dealings in Russia and sell its entire stake in the Zhoushan unit. The company emphasized that it would have no ownership in the yard following the sale. Less than a month after the sanctions were announced, Nantong Economic and Technological Development Zone Holding Group, a state-owned enterprise, emerged as the new owner. This group is a subsidiary of Nantong’s municipal government and has access to favorable credit terms. The shipyard has since been renamed Zhoushan Tongzhou Offshore Engineering.
While the sanctions were specific to the Zhoushan unit, Wison remains active in the offshore construction sector. The company recently broke ground on a new, unsanctioned shipyard complex called Wison New Energies Qidong Yard. This facility aims to compete in the same market as the sanctioned Zhoushan yard and will focus on large-scale engineering, procurement, construction, installation, and commissioning (EPCIC) contracts, including floating LNG (FLNG) units, floating production storage and offloading (FPSO) vessels, and plant modules.
