TotalEnergies has announced plans to exit its stake in the Arctic LNG 2 plant in Russia over fears of sanctions by the European Union following Russia’s continued war against Ukraine.
Company CEO Patrick Pouyanne revealed the company will transfer it’s 10% stake in the plant to Nordline, a subsidiary of the plant’s majority owner Novatek in a transaction that has been approved by Russian authorities.
TotalEnergies has been one of the few companies to have maintained its presence in key Russian plants exporting LNG during the ongoing war with Ukraine.
However following European Union sanctions that will ban companies from importing Russian gas or selling it in other jurisdictions from 2027, the company has been forced to sever its ties with the plants.
Noting that TotalEnergies had already taken a $4.1 billion impairment on the project in 2022 and declared force majeure the following year, Pouyanne said he considered the proposal from Novatek to be in the company’s interest.
“Soon after Arctic LNG 2 became subject to U.S. sanctions in November 2023, Novatek approached us about a potential transfer,” Pouyanne said.
He however refused to use ‘sale’ while describing the transaction and TotalEnergies have refused to reveal if compensations are arranged as part of the transaction.
