Former CEO Joel Riddle revealed that he discovered Novatek was providing capital and directing operations without the necessary clearance from the U.S. Treasury’s Office of Foreign Assets Control (OFAC). The startup, founded in March 2026, aimed to export gas from Alaska’s North Slope using modular gravity-based structures sourced from the Russian firm. Although the company maintains that all activities remain in full compliance with U.S. law, the project is currently stalled as it awaits a federal license to purchase the Russian-made infrastructure.

Concerns over potential sanctions violations escalated after executives briefed government officials on Novatek’s involvement. While the U.S. has not sanctioned the parent company directly, it previously blacklisted Novatek’s Arctic LNG-2 project. Polar LNG has since dismissed the allegations, labeling Riddle a disgruntled former employee and initiating an internal investigation into his conduct. Meanwhile, the startup continues to search for domestic investors to replace the controversial funding, leaving its goal of beginning gas deliveries by 2030 in significant doubt.