TotalEnergies exits Russian Arctic LNG project

PARIS

This file photograph shows the logo of TotalEnergies at the Total Energies refinery site, in Gonfreville-l'Orcher, near Le Havre, northwestern France, on October 5, 2022. (AFP Photo)

French energy giant TotalEnergies said on Aug. 27 that it had completed its exit from a Russian gas project hit by Western sanctions following Russia's invasion of Ukraine.

Chief executive Patrick Pouyanne announced in July a plan to transfer its 10 percent stake in the Arctic 2 liquefied natural gas project to the majority shareholder Novatek.

The firm had already taken a $4.1 billion write-down of its stake in Arctic 2 in 2022, following the outbreak of the Ukraine war that year.

"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.

It said it still had the right to reimbursement by Arctic 2 of $1.3 billion in loans it provided with other shareholders, while indicating that repayment was unlikely for now.

"Such reimbursement might be implemented in the future subject to applicable sanctions," it said.

Most Western companies quickly sold off their Russian operations and holdings after the Ukraine invasion, or at least isolated them, as sanctions have made trading in most goods difficult.

Russia has since made it difficult for firms to leave, requiring presidential authorization for deals. Pouyanne said in July that TotalEnergies had recently received approval for the Arctic 2 stake transfer.

Novatek, which was founded in 1994, had been TotalEnergies's main partner in Russia and they jointly launched in 2013 the massive Yamal natural gas field in Siberia from which they ship LNG to Europe.

TotalEnergies holds a 19.4 percent stake in Novatek and a 20 percent stake in Yamal.

Total says it cannot sell its Novatek stake given the current sanctions regime against Moscow.