By Ayomide Otitoju
French energy giant TotalEnergies has completed its exit from the Arctic 2 liquefied natural gas (LNG) project in Russia, following the transfer of its 10 per cent stake to NordLine, a subsidiary of Russian gas producer Novatek.
The company confirmed on Thursday that the transfer had been completed, ending its direct ownership in the Arctic LNG 2 project, which has been affected by Western sanctions imposed following Russia’s invasion of Ukraine.
TotalEnergies Chief Executive Officer Patrick Pouyanne announced the planned transfer in July after the company secured approval from Russian authorities for the transaction.
The energy company had already written down the value of its Arctic 2 investment by $4.1 billion in 2022 following the outbreak of the Ukraine war.
“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.
TotalEnergies said it retains the right to recover $1.3 billion in loans it provided to Arctic 2 alongside other shareholders, although it acknowledged that repayment is unlikely under the current sanctions environment.
“Such reimbursement might be implemented in the future subject to applicable sanctions,” the company said.
Many Western companies moved to sell or isolate their Russian operations after the invasion of Ukraine, as sanctions disrupted trade and financial transactions involving Russia.
However, Moscow subsequently introduced restrictions requiring presidential approval for many transactions involving foreign companies seeking to leave the country.
Novatek, founded in 1994, has been TotalEnergies’ major Russian partner. The companies jointly launched the Yamal natural gas project in Siberia in 2013, from which LNG is exported to Europe.
TotalEnergies currently holds a 19.4 per cent stake in Novatek and a 20 per cent interest in the Yamal project.
The French energy company said it cannot sell its stake in Novatek under the current sanctions regime against Moscow.
