Putin Authorizes TotalEnergies to Sell Its Stake in Arctic LNG 2
In a rare Kremlin‑approved transaction, Russian President Vladimir Putin has given TotalEnergies SE permission to divest its 10 % interest in the Arctic LNG 2 project, a liquefied natural‑gas export venture located on the Yamal Peninsula. The presidential order, reported by the Russian news agency Interfax, allows the French energy giant to transfer its share to NordLine LLC, a newly created subsidiary of Novatek, which holds the remaining 60 % of the project.
Background on Arctic LNG 2
The Arctic LNG 2 facility was conceived as one of Russia’s flagship LNG export initiatives, with a total investment exceeding US $21 billion. Construction began after the project received final approval from the U.S. Department of Commerce in late 2023, a move intended to curb Russia’s ability to expand super‑chilled fuel shipments to global markets.
Despite the sanction‑laden environment, the plant started loading LNG onto so‑called “shadow fleet” vessels in 2024 and has gradually ramped up output. Current production remains well below the design capacity of 19.8 million tonnes per year, and to date all cargoes have been directed to a single receiving terminal in southern China.
Details of the Presidential Authorization
According to the decree published by Interfax:
- TotalEnergies may sell its 10 % equity stake to NordLine LLC.
- NordLine LLC is a wholly owned subsidiary of Novatek, the majority owner of Arctic LNG 2.
- Financial terms of the transfer have not been disclosed.
- The authorization follows a prior write‑down of TotalEnergies’ Arctic LNG 2 holding, which the company said generated no revenue after Russia’s invasion of Ukraine.
The move aligns with TotalEnergies’ earlier public statements that the asset had become economically non‑viable under Western sanctions and that the firm had already impaired the investment on its balance sheet.
Implications for TotalEnergies and Russian Energy Strategy
For TotalEnergies, the divestment removes one of the last major Western‑held interests in a strategically important Russian energy asset. The company continues to retain exposure to other Russian projects, notably the Yamal LNG plant (which is not directly sanctioned) and a minority stake in Novatek itself.
From Moscow’s perspective, the transaction consolidates state‑aligned control over Arctic LNG 2, reinforcing Russia’s pivot toward Asian markets as the European Union prepares to phase out all Russian gas imports by 2027. By keeping the project under domestic ownership, the Kremlin aims to shield the venture from further Western restrictions while seeking to increase LNG shipments to China and other Asian buyers.
Industry analysts note that such Kremlin‑approved asset transfers have become infrequent since the onset of the Ukraine conflict, making this case a notable exception that underscores both the pressure on Western firms to exit Russian energy holdings and Russia’s determination to maintain control over its key export infrastructure.
While the exact financial impact on TotalEnergies remains undisclosed, the deal allows the firm to eliminate a non‑performing asset and focus capital on lower‑risk opportunities elsewhere, in line with its broader strategy of reducing exposure to geopolitically sensitive regions.
