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(Bloomberg) — Russian President Vladimir Putin authorized TotalEnergies SE to sell its stake in a US-sanctioned liquefied natural gas export project in the Arctic, a rare move that will allow the French major to exit a project strangled by western restrictions.
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TotalEnergies will be allowed to transfer its 10% stake to a company called NordLine LLC, according to a presidential order. According to Interfax, the company is a newly created subsidiary of Novatek, which owns 60% of Arctic LNG 2. No terms were set out.
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TotalEnergies previously wrote down the value of its interest in Arctic LNG 2 because of Russia’s war in Ukraine, and has consistently said it’s taken no revenue from the project.
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The $21 billion-plus Arctic LNG 2 was sanctioned by the US in late 2023 in an effort to curb Russia’s ability to expand exports of the super-chilled fuel. The facility began shipping the fuel via shadow fleet vessels the following year, and has slowly ramped up output — even though it’s operating far below intended capacity. So far, shipments have only been delivered to a single port in Southern China.
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The move will consolidate Russia’s hold over its largest LNG export project by capacity, as part of a wider strategy by Moscow to expand sales to Asia. The European Union will ban all gas purchases from Russia from 2027.
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TotalEnergies was among a handful major Western energy companies that retained stakes in a strategic Russian projects after the invasion of Ukraine. While a number of foreign investors have exited Russia since then, Kremlin approvals for the sale of significant assets have become relatively rare in the resent years.
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TotalEnergies declined to comment The major still holds stakes in other assets in Russia, including the Yamal LNG export project — which isn’t directly sanctioned — and Novatek itself. TotalEnergies agreed to take the stake in Arctic LNG 2 in 2018.
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Novatek didn’t immediately respond to a request for comment.
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—With assistance from Stephen Stapczynski, Francois de Beaupuy and Olga Tanas.
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(Updates with details throughout.)
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English (US)