Report: Sanctioned Russian energy giant secretly funded US gas project

A sanctioned Russian energy company secretly helped finance an Alaska gas project later discussed by US envoys at the Kremlin, according to a New York Times investigation relayed by the Kyiv Independent. ^[1]

The Times reported on October 23 that Novatek supplied at least some funding to Polar LNG, a US startup pursuing a multibillion-dollar project to liquefy and export Alaska's natural gas. Its account cited the venture's former chief executive and two other people familiar with the matter, according to the Kyiv Independent's October 25 article. ^[1]

The proposal also reached high-level diplomacy. People familiar with the negotiations told the Times that Vladimir Putin discussed it with US envoys Steve Witkoff and Jared Kushner during their September Kremlin visit. The project connects a proposed American energy development with Russian commercial interests and diplomacy over the war in Ukraine. ^[1][2]

John Riddle, Polar LNG's former chief executive, told the Times he had been led to believe the money came from a company in the United Arab Emirates. He resigned in September after learning of hidden ties to Novatek, according to the Kyiv Independent. ^[1]

Riddle objected to what he described as "Russian technology controlling the commercialization of Arctic gas in the North Slope." He also described the arrangement as unlawful and said he had notified Trump administration officials about the financing and urged them to investigate. That legal judgment is Riddle's, not an official finding. ^[1][2]

A prospective stake and an alleged payment

Novatek told the Times it was seeking "minority shareholder" status in the Polar LNG project. That statement acknowledges an interest in joining the venture, but does not confirm that the Russian company had already supplied money. ^[1][2]

Novatek is a Russian producer of liquefied natural gas subject to US sanctions imposed after Russia's full-scale invasion of Ukraine in 2022. Polar LNG's proposed business is to turn Alaska gas into liquid for export, making the origin of its capital and the terms of any Russian participation central questions for the venture. ^[1][2]

For sanctions enforcement, the practical issue would be tracing the transaction: who supplied the money, through which entities, on what dates and under what terms. Those details would allow authorities to test the arrangement against the restrictions that applied, rather than draw a legal conclusion from a company's nationality alone.

The allegation about the Emirates company matters for that reason. Riddle's account describes a gap between the source of funds he says he was given and the Russian connection he says he later discovered. Establishing that route would be essential to assessing his allegation. ^[1]

His objection also reaches beyond the money. Riddle's reference to technology raises a separate question about what Novatek would contribute to the venture and what rights would accompany that contribution. ^[1][2] A minority shareholding alone would tell regulators little about the terms of a technology agreement. Ownership, financing and technology would each need scrutiny.

The warning over approvals

The potential consequences extend beyond ownership. The Daily Beast reported that a memo prepared for Polar LNG by its outside law firm, Baker Botts, warned that perceived ties to Novatek could jeopardize licenses and other regulatory approvals. It also reported that federal officials had expressed concern about a Polar LNG investor's links to Novatek. ^[2]

That is a business risk even before any enforcement decision. A multibillion-dollar export proposal needs a workable path through regulatory approvals. A warning from its own outside lawyers about the effect of a prospective partner's ties deserves weight, though it is not a ruling that the project broke the law.

The warning concerned even perceived ties to Novatek, according to the Daily Beast. ^[2] That leaves Polar LNG with a disclosure problem as well as a potential compliance problem: regulators assessing an application would need a reliable account of who stands behind the project. An opaque funding structure could make that assessment harder even if the transactions ultimately proved lawful.

The allegations remain unconfirmed. The amount and route of any Novatek funding, whether authorities opened an investigation, and whether Witkoff and Kushner knew about the alleged financing are not known. No sanctions violation has been established.

The Daily Beast said the White House had not immediately responded to its request for comment. ^[1][2]

A commercial proposal inside diplomacy

Our view is that commercial proposals raised during peace diplomacy need especially clear financial disclosure. Negotiators can discuss a project's strategic appeal while regulators examine its ownership and funding, but diplomatic attention cannot answer the compliance questions. A meeting is no substitute for transaction records.

The next substantive test is documentary: Polar LNG's funding records, investor disclosures and contracts, followed by any response from the relevant US agencies. Those records would show whether the proposed minority investment and the alleged earlier financing were separate arrangements or parts of the same deal. That is where an allegation about hidden Russian money can become a finding that regulators can act on.