Russia allowed France's TotalEnergies to withdraw from Novatek's sanctioned project

Russian President Vladimir Putin has authorized one of the world's largest oil and gas companies, France's TotalEnergies, to sell its stake in the Arctic LNG 2 liquefied natural gas export project under U.S. sanctions.

TotalEnergies will transfer its 10 percent stake to NordLine LLC, a newly created subsidiary of Russian gas giant Novatek, which owns 60 percent in Arctic LNG 2. The terms of the deal were not specified in Putin's order.

Thus, Novatek's share in the project will reach 70%. Chinese CNPC, CNOOC and a Japanese consortium headed by Mitsui will retain 10% each, according to the official website of Arctic LNG 2.

TotalEnergies declined to respond to Bloomberg's request for comment.

TotalEnergies shares added 0.9% in Paris trading, up 39% YTD.

TotalEnergies remained one of the few major Western energy corporations to retain stakes in strategic Russian projects after the outbreak of hostilities in Ukraine. Despite the fact that a number of foreign investors have since left Russia, Kremlin approval for the sale of significant assets has become relatively rare in recent years, Bloomberg notes.

TotalEnergies still holds stakes in other Russian assets, including the Yamal LNG export project, which is not under direct sanctions, as well as in Novatek itself.

TotalEnergies had previously written down the value of its stake in Arctic LNG 2 and has consistently said it does not receive any revenue from the project, Bloomberg reports.

The Arctic LNG 2 project, worth more than $21 billion, came under U.S. sanctions at the end of 2023, as Washington tried to limit Russia's ability to expand liquefied natural gas exports. However, the following year, the company began shipping raw materials using shadow fleet vessels. So far, shipments have been made only to one single port in South China.

This article was AI-translated and verified by a human editor