TotalEnergies Completes Exit From Russia’s Arctic LNG 2 Project After Sanctions Hit

French energy giant TotalEnergies has completed its withdrawal from Russia’s Arctic LNG 2 project, ending its ownership stake in the major gas development after Western sanctions disrupted the project following Russia’s invasion of Ukraine.

TotalEnergies confirmed on Thursday that it had transferred its 10 per cent interest in Arctic LNG 2 to NordLine, a subsidiary of Russian gas producer Novatek, the project’s majority shareholder.

“TotalEnergies confirms that the transfer of its 10 percent interest in Arctic LNG 2 to NordLine (a Novatek subsidiary) has been completed. TotalEnergies is therefore no longer a shareholder,” the company said.

The French energy company had already written down the value of its Arctic LNG 2 investment by $4.1 billion in 2022 following the outbreak of the Ukraine war and the subsequent sanctions imposed on Russia.

TotalEnergies said it retains the right to recover $1.3 billion in loans it provided to the project alongside other shareholders. However, the company acknowledged that repayment is unlikely under the current sanctions environment.

“Such reimbursement might be implemented in the future subject to applicable sanctions,” TotalEnergies said.

The exit required approval from Russian authorities, as Moscow introduced restrictions on foreign companies seeking to dispose of Russian assets after many Western businesses moved to leave the country. TotalEnergies Chief Executive Patrick Pouyanne said in July that the company had secured approval to transfer its Arctic LNG 2 stake.

The French company and Novatek have maintained a long-standing partnership in Russia. The two firms launched the Yamal LNG project in Siberia in 2013, with the facility supplying liquefied natural gas to international markets, including Europe.

TotalEnergies still owns 19.4 per cent of Novatek and a 20 per cent interest in Yamal LNG. The company said it cannot currently sell its Novatek stake because of the sanctions regime imposed against Moscow.