Chinese energy firm packs its bags to join the exodus from Russia

China-based provider of clean energy services Wison New Energies has signaled its intention to suspend all current and future Russian operations. This decision comes shortly after the Group of Seven (G7) accused China of ‘enabling’ Moscow’s war machine and warned about further sanctions against all those who support Russia. The European Union (EU) also revealed its 14th package of sanctions against the country.

In the wake of the heavy sanctions imposed by the U.S. on Russia due to the prolonged conflict in Ukraine, many countries and corporations have pulled out of the country. Some big Chinese banks have also headed for the exit to avoid restrictions that would make financing other global projects difficult.

As a result, some Chinese players are trying to tackle these financial hardships by using smaller banks or brokers, while most are making a clean break and leaving the Russian market until things change. The latest player to do so is Winson, an energy company that went through a rebranding in January.

A few days ago, the clean energy player announced that it would discontinue all ongoing projects and stop taking new Russian business until further notice following a decision by its board of directors.

“We appreciate the good relations we have built with our Russian partners in the past and value the work we have done together. However, in view of the strategic future of the company, we have to make this difficult decision,” reads a statement by Wison.

This means that Novatek’s Arctic LNG 2, which started production in January, will also be affected. The facility, located on the Gydan peninsula in West Siberia, is said to be crucial for Russia’s goal to more than triple its LNG production to 100 million tons by the end of the decade.

Furthermore, the company shared its intention to sell its entire stake in Zhoushan Wison Offshore & Marine Limited, noting that neither it nor its affiliates would have any stake in the new ownership structure. Zhoushan is a large module fabrication yard where Wison started the construction of modules for the Arctic LNG 2 project in late 2019.

The Chinese player acknowledged the impact of its decision on partners and employees, explaining that it intends to make an effort to ensure a smooth transition while looking for new long-term development opportunities.

This comes on the heels of measures targeting Russia introduced by the EU’s 14th package of sanctions, the first one to include LNG. More precisely, all future investments in, and exports to, LNG projects under construction in Russia are prohibited. Moreover, the EU plans to ban the use of its ports for the transshipment of Russian natural gas.

While Wison intends to stop operations in and with Russia, it has taken on work in Indonesia. On June 20, the firm signed an engineering, procurement, construction, installation, and commissioning (EPCIC) contract with two subsidiaries of Malaysia’s Genting for the delivery of a floating liquefied natural gas (FLNG) facility, said to be the first in Indonesia.