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Image courtesy of Gazprom.

Expanded western sanctions against Russia may threaten a potential partnership between Shell and Gazprom to develop the Sakhalin-3 project at the Yuzhno-Kirinskoye Field.

The U.S. government announced on Friday that it will restrict exports, re-exports and transfers of the technology and equipment to the Yuzhno-Kirinskoye Field, located on the island of Sakhalin.

“The Yuzhno-Kirinskoye Field is being added to the Entity List because it is reported to contain substantial reserves of oil,” a rule notice in the Federal Register said.

Last week, Bloomberg reported that Shell was in talks with Russia’s Gazprom to potentially swap a stake in an international asset for an interest in the Sakhalin-3 project.

“Russia sits on 25 percent of the world’s gas reserves and is very, very close to markets that we are very familiar with,” Shell CEO Ben Van Beurden told Bloomberg.

Companies are now prohibited from exporting or re-exporting items to the field that are either of U.S. origin or contain at least 25 percent of U.S. origin items, Reuters said.

Although companies can circumvent the restriction by applying for a license from the Commerce Deparmtnet, international trade lawyer Douglas Jacobson told the news wire that such licenses are “not likely” to be issued.

“It is clear that this is a signal to Shell – don’t go into new projects, deal with existing ones,” an anonymous Russian energy executive working on Sakhalin projects told Reuters

Sakhalin-3 is slated to boost natural gas capacity at the Sakhalin-2 project to as much as as 15 million tons per year within the next ten years, up from current levels of about 10 million tons per year.

Shell is the only foreign firm that has disclosed interest in the project so far, Reuters added.

“New sanctions is a surgical strike aimed at slowing down Gazprom’s LNG projects in Asia. It will be impossible for Gazprom to develop Yuzhno-Kirinskoye without partners,” Moscow-based energy analysts Alexander Kornilov told Reuters.

U.S. and EU sanctions against Russia’s oil and gas industry were put into place in March 2014 after the downing of Malaysia Flight 17 and the annexation of Crimea.

Western action against Russia quickly escalated as Vladimir Putin showed no intention of cutting funds to pro-Russian separatist troops in Ukraine.

In September, the U.S. and EU tightened financial sanctions against Russian oil companies including Rosneft, Gazprom and pipeline operator Transneft that prohibit the companies from receiving bank loans with a maturity date longer than 30 days.

Exports of technology and equipment for unconventional, harsh environment and deepwater exploration and production to Russia are also barred.