(Bloomberg) -- Russian missile strikes hit an apartment building and a recreation center near the Black Sea port of Odesa early Friday, killing 17 people after its forces withdrew from nearby Snake Island. 

Ukrainian President Volodymyr Zelenskiy used his nightly address to praise the departure of Russian forces from the strategic southern isle. Moscow painted it as a gesture toward easing grain shipments, but Kyiv said they were forced out Ukrainian shelling. 

Russian President Vladimir Putin signed a decree to transfer rights for the Sakhalin-2 natural gas project to a new Russian company, a move that could force foreign owners including Shell Plc out. The move could also pressure Japanese trading houses to drop ownership in the plant, or disrupt vital LNG deliveries to the country.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Putin’s Swoop on Key Gas Plant Could Force Foreign Partners Out
  • Russia’s Oil Revival Gets Some Help From Domestic Refineries
  • Ukraine Considering Debt Restructuring Options as Payments Loom
  • US Treasury Blocks $1 Billion Trust Tied to Russian Oligarch
  • Russia Withdraws Troops from Snake Island After Ukraine Strikes
  • Lawmakers Slam London’s ‘Dirty Money’ Habit and UK Sanctions

On the Ground

As the largest-scale military operation in Europe since World War II continues in its fifth month, Russia kept up its push to capture Ukraine’s Donetsk and Luhansk regions. Kremlin forces are closing in on Lysychansk, Ukraine’s last major foothold in Luhansk. The region’s governor described the situation as “extremely difficult” with evacuations not possible and Russian troops at the city’s outskirts. Near Odesa, a Russian missile hit a nine-storey apartment building at 1 a.m. killing 14 people and wounding 30, said Serhiy Bratchuk, the military spokesman for the region. Another missile killed three people at a recreation center early Friday. Russia continued to strike targets far from the eastern front, keeping up a volume and intensity that’s risen since last weekend. 

(All times CET)

Orban Softens Sanctions Tone (9:05 a.m.)

Hungary won’t keep standing in the way of European Union sanctions except on vital matters of energy policy, Prime Minister Viktor Orban said, softening his tone on Ukraine without making concrete concessions.

Budapest will still oppose any sanctions on natural gas imports, Orban told public radio in his weekly interview on Friday. However, it can’t constantly “go against the flow of traffic” in the bloc on non-energy issues.

Hungary is Russia’s closest ally in the EU and Orban has had personal disputes with Zelenskiy. The Hungarian premier has also managed to get EU sanctions packages watered down. The EU has retained clout by threatening to withhold billions of euros in aid from Hungary over Orban’s domestic policies.

Putin Offers Indonesia Rail Investment (7:20 a.m.)

Putin offered to have Russian Railways invest in Indonesia’s new capital, in a sign of warming ties with Southeast Asia’s biggest economy as the US and its allies seek to isolate Moscow.

Putin said Moscow could take part in President Joko Widodo’s plan to move Indonesia’s capital to the island of Kalimantan from Jakarta, according to a statement by the Russian Embassy in the country. He made the comments during Jokowi’s visit to Moscow on Thursday, it said.

Indonesia has come under pressure by the US and other countries to prevent Putin from joining the Group of 20 summit, which is set to take place in Bali. The Russian leader made no comment on whether he’ll attend in person.

Foreign Firms Caught in Gas Swoop (6:33 a.m.)

The decree to transfer rights to the Sakhalin-2 natural gas project cites threats to Russia’s national interests and economic security, according to a statement dated June 30, issued by the Kremlin and signed by Putin. Stakeholders have one month to say whether they’ll take a holding in the new company, and those who opt out may not be fully compensated, the statement said. 

The move could prove complicated for Shell, which holds a 27.5% stake in the liquefied natural gas facility in Russia’s far east. Japanese trading houses Mitsubishi Corp. and Mitsui & Co., which fell in early trading Friday on the news, own a combined 22.5% of the project, and a majority of the gas produced there supplies Japan.

Read more: Putin’s Swoop on Key Gas Plant Could Force Foreign Partners Out

Zelenskiy Hails Snake Island Win (11:20 p.m.)

Zelenskiy said the departure of Russian forces from Snake Island “significantly changes” the situation in the Black Sea, while urging caution about how much it will really affect the course of the war.

“It does not guarantee safety yet, it does not yet guarantee that the enemy will not return,” Zelenskiy said in his nightly address to the nation. “But it already limits the actions of the occupiers significantly. Step by step, we will drive them out of our sea, our land and our sky.”

At the same time, Zelenskiy said the fighting in the Donbas region “remains the toughest” in the conflict, adding that Ukraine is outgunned by Russian forces. 

©2022 Bloomberg L.P.