TotalEnergies completes exit from Arctic LNG 2 after stake transfer to NordLine
Key Takeaways
- •TotalEnergies no longer holds any interest in Arctic LNG 2 after transferring its 10% stake to NordLine.
- •Russia approved the transfer of TotalEnergies’ shareholding earlier this year.
- •The U.S. Treasury sanctioned Arctic LNG 2 in November 2023, disrupting logistics, financing, equipment supplies, LNG sales and shipping access.
- •TotalEnergies retains a possible claim for reimbursement of about $1.3 billion related to shareholder loans.
- •Arctic LNG 2 is a planned three-train LNG project on Russia’s Gydan Peninsula with a combined design capacity of 19.8 million tonnes per year.
French energy major TotalEnergies has completed the transfer of its 10% interest in Novatek's Arctic LNG 2 project to NordLine, a subsidiary of the Russian gas producer, formally ending its involvement in the sanctioned development.
The company confirmed the completion of the stake transfer and said it now holds no remaining interest in Arctic LNG 2. Russia approved the transfer of TotalEnergies' 10% shareholding earlier this year.
Under the project's original ownership structure, Novatek, Russia's largest independent natural gas producer, held a 60% stake, while TotalEnergies, China's CNPC and CNOOC, and Japan Arctic LNG each held 10%. CNPC and CNOOC are Chinese state-owned energy groups, and Japan Arctic LNG is the vehicle backed by trading house Mitsui & Co. and the state-owned Japan Oil, Gas and Metals National Corporation (JOGMEC) that groups the Japanese interest in the project.
The US Treasury's Office of Foreign Assets Control placed Arctic LNG 2 under sanctions in November 2023, complicating a project that depends on specialised logistics, financing, and equipment flows to bring Arctic gas to market. The measures disrupted equipment supplies, financing, LNG sales, and access to the specialised shipping the project requires.
Under the transfer agreement, TotalEnergies retains its right to be reimbursed by Arctic LNG 2 for its share of the loans provided by the project's shareholders, amounting to around $1.3bn. According to the French company, such reimbursement could be implemented in the future, subject to applicable sanctions.
Arctic LNG 2 is located on the Gydan Peninsula in the Russian Arctic and centres on the Utrenneye gas and condensate field. It was designed to become one of Russia's largest LNG export projects and follows Novatek's earlier Yamal LNG venture (16.5m tonnes per year) across the Gulf of Ob. The Arctic LNG 2 development relies on large gravity-based structures and was originally expected to cost about $21bn.
The project was originally planned to comprise three LNG trains with a combined capacity of 19.8m tonnes per year, with each train capable of producing about 6.6m tonnes per year.
Source: Splash247
