TotalEnergies Exits Arctic LNG
Putin Authorizes Nordline To Acquire TotalEnergies' 10% Stake In Sanctioned Arctic LNG 2
Anonymous
Russian President Vladimir Putin has authorized Nordline LLC to acquire France’s TotalEnergies’ 10% stake in the heavily sanctioned Arctic LNG 2 project, a move reflected in a decree published on a Russian legal portal. Reuters reported that the decree provides no details on Nordline or the transaction terms, and TotalEnergies declined to comment. Multiple reports frame the authorization as a potentially major Western exit from Russia’s gas sector after U.S. sanctions targeted Arctic LNG 2 in late 2023 and TotalEnergies invoked force majeure on LNG offtake contracts, while impairments and uncertainty deepened. The project remains constrained by sanctions, shipping and export hurdles, and has not reached its originally planned capacity despite earlier work progressing on the first train. Arctic LNG 2’s remaining ownership includes Novatek and Chinese state firms, with the Mitsui/JOGMEC consortium holding the rest, while TotalEnergies retains an indirect stake via its shareholding in Novatek and its other LNG investments.
Key Points
1
The presidential decree text (as quoted by TASS) says Putin authorized Nordline Limited Liability Company “to complete a transaction of acquiring 10 percent of the shares in the charter capital of the Arctic LNG 2 Limited Liability Company, owned by TotalEnergies EP Salmanov.” TASS also reported that Nordline is a Novatek subsidiary established in May 2023.
2
TotalEnergies has effectively treated its Arctic LNG 2 position as dead for years: it stopped booking proved reserves for Arctic LNG 2 in March 2022 (days after Russia launched its invasion) and later declared force majeure on its offtake commitments in early 2024 after the U.S. designated Arctic LNG 2 a sanctions target in November 2023.
3
TotalEnergies’ Russian LNG losses have been large: the Eastern Herald article says TotalEnergies has absorbed more than $11 billion in impairments on its Russian energy holdings since the war began.
4
GCaptain adds context on TotalEnergies’ broader Russian exposure: beyond its 10% direct stake in Arctic LNG 2, TotalEnergies owns 20% of the operational Yamal LNG project and holds a 19.4% shareholding in Novatek, with earlier reporting estimating its combined direct/indirect economic interest in Arctic LNG 2 at roughly 21.6% when it acquired the stake in 2019.
5
The deal is structured as a disposal of TotalEnergies’ direct stake, but the decree contains major blanks: an Eastern Herald account says there was no valuation in the decree and no indication of who controls NordLine, and it described the transaction as NordLine being allowed to enter an agreement to buy the 10% holding currently held by TotalEnergies EP Salmanov.
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