As Russia increasingly looks to Asia to offload LNG, talk of a Chinese-built – and backed – shadow fleet working to provide a sanction work-around is getting louder and louder

What: China is reportedly behind a sanctions-busting shadow fleet of LNG tankers – many of which are operating through shell companies.

Why: In part to guarantee the continued inflow of LNG, but also to back a long-term ally in Moscow, Beijing is stepping up to the plate, albeit under cover of darkness and deniability.

What next: Expect further revelations in the weeks and months ahead as global media looks to ‘out’ Beijing’s shadow fleet.

China appears to be constructing a discreet fleet of LNG tankers capable of moving sanctioned Russian fuel in what is an emerging tactic that would allow Moscow to preserve export revenue while tightening the energy relationship between the two states. Backing this belief is shipping and satellite data cited by Bloomberg suggest that vessels linked to Chinese interests are beginning to adopt the opaque operational patterns long associated with the already extant so-called “dark fleet” that transports sanctioned Russian and Iranian crude.

One of the most conspicuous examples is the LNG carrier CCH Gas, according to UNITED24 MEDIA. The vessel has masked parts of a recent voyage as it nears a Chinese port with a cargo sourced from a blacklisted Russian exporter. The ship is nominally owned by CCH-1 Shipping, a firm registered to a Hong Kong address used by Samxin Secretarial Services - a mailbox company often linked to obscure beneficial ownership in sanction-sensitive trades. A second vessel, recently renamed Kunpeng, has shifted into the hands of companies registered in China and the Marshall Islands, jurisdictions that have previously hosted front entities involved in sanctioned energy movements. The Kunpeng was recently spotted in waters off Singapore – an area known for illicit ship-to-ship transfers of LNG in recent months.

Such activity suggests that Moscow is no longer merely offloading discounted LNG to willing buyers but is actively building a parallel transport system to sustain its export flows in the face of tightening Western restrictions. Reports to this end indicate that Russia has already amassed more than a dozen LNG carriers under shell-company ownership spanning several countries. But this is no easy task. LNG shipping relies on highly specialised cryogenic vessels that must maintain temperatures of –162°C, and the global fleet is comparatively small, making sudden changes in ownership or routing more visible.

Of late, Chinese involvement appears to extend beyond the acquisition or chartering of vessels. The CCH Gas is linked to Pacific Gas, a mainland-controlled shipping firm operating from Hong Kong, Shanghai and Singapore. Satellite imagery earlier this year showed the ship positioned alongside the Perle, another vessel carrying sanctioned LNG from Portovaya, suggesting a possible ship-to-ship transfer - a method increasingly used to disguise the origin of restricted cargoes. The report by UNITED24 MEDIA adds that when journalists attempted to locate CCH-1 Shipping at its registered address, they found only a locked and unstaffed office, reinforcing suspicions that the company exists primarily as an ownership veil.

At the same time, Chinese shipyards have reportedly been servicing sanctioned Russian LNG carriers. Two vessels — Sputnik Energy and East Energy — were observed undergoing maintenance in Zhoushan, suggesting that Chinese facilities may be providing essential technical support for Russia’s sanctioned LNG logistics. If substantiated, this would mark a notable shift: rather than serving merely as a market for discounted gas, China would in fact be helping maintain the physical infrastructure behind Russia’s circumventive export system.

These developments indicate that Beijing’s role in Russia’s sanctions-busting energy trade is both deepening and diversifying.

Illegal shipping activity along and around China’s coastline has expanded in scale and sophistication, reflecting the country’s position at the centre of Asian maritime trade and its proximity to several heavily sanctioned economies. Analysts in recent years have note a marked rise in clandestine ship-to-ship transfers, identity-masking practices and irregular coastal movements involving everything from crude oil and LNG to coal, chemicals and high-value electronics. These operations often occur just outside territorial waters or within the vast network of bays and inlets along China’s eastern seaboard, where surveillance gaps can be exploited.

One persistent strand particularly relevant to energy shipping involves vessels linked to North Korea, which routinely disable transponders, falsify manifests or conduct covert transfers to circumvent United Nations sanctions – the same tactics used by tankers moving sanctioned Russian or Iranian oil - some of which also operate under shell-company ownership or repeatedly change names and flags to avoid detection. China’s dense port infrastructure, combined with its large private shipping and logistics ecosystem, has inadvertently created opportunities for shadow operators to blend in with legitimate flows.

For Russia, which has struggled to replace lost European markets, LNG shipment to Asia have become a central pillar of its post-2022 export strategy, and Chinese assistance offers a route to preserve revenue streams that would otherwise come under heavy pressure. For China, sourcing LNG through discreet channels offers both commercial and strategic advantages: discounted gas, an alternative supply path beyond pipeline routes, and greater influence within a relationship increasingly defined by Moscow’s dependence. The lack of clarity also allows Beijing an all-important basis for deniability.

Western regulators face growing difficulty responding to this evolution. The obfuscation of shipping ownership, coupled with the limited size of the LNG fleet, complicates tracking efforts already strained by the proliferation of shadow oil tankers. Insurance providers and port operators have begun scrutinising vessels suspected of involvement in sanctioned trades, but the spread of shell-company ownership, irregular routing and ship-to-ship transfers risks outpacing enforcement mechanisms.

Taken together, the emerging picture is of China transitioning from a passive recipient of sanctioned LNG into an enabling node within a broader system designed to maintain Russia’s export capacity. If the reported details prove accurate, Beijing is becoming an essential component of the Kremlin’s attempt to outmanoeuvre sanctions - raising questions about China’s long-term alignment with the global sanctions architecture and how far it is prepared to go in shielding Russia’s energy sector from international restrictions.