TotalEnergies eyes exit from outlawed Arctic LNG 2
The French company’s 10 percent ownership stake in the sanctioned Russian gas project is likely to be acquired by a subsidiary of Novatek.
On 3 June, Russian President Vladimir Putin signed a decree allowing Nordline to acquire the French stake in the disputed Arctic LNG 2 project.
Nordline is a subsidiary of Novatek. It was established in 2025, according to information from a Russian corporate registry.
For TotalEnergies, Putin’s new decree offers a welcome opportunity to exit the project, which has increasingly become a burden for the company.
None of the involved companies have yet made any official statements about a deal.
Arctic LNG 2 was projected to become Russia’s largest producer of liquefied natural gas. In 2018, Total (now TotalEnergies) and Novatek signed an agreement under which the French company acquired a 10 percent stake in the project. Novatek retained percent, while the Chinese CNPC and CNOOC acquired 10 percent each, and the Japanese Mitsui and JOGMEC shared the remaining 10 percent.
“Total is delighted to be part of this new world-class LNG project alongside its partner Novatek,” Patrick Pouyanné, chairman and CEO of Total, said at the time.
Construction work soon began on the Gydan Peninsula, on the shore of the Ob Bay. Arctic LNG 2 was designed to produce almost 20 million tonnes of LNG per year. Three floating production units—so-called gravity-based structures—were to be built at Novatek’s LNG Construction Centre in Belokamenka, near Murmansk.
However, Russia’s full-scale war of aggression against Ukraine soon disrupted these plans. In 2023, the project was placed on the sanctions list of the US Treasury. Almost all vessels and infrastructure linked to the project also became subject to sanctions.
As soon as Russia launched its full-scale invasion, TotalEnergies began publicly distancing itself from its cooperation with Novatek. In late 2022, the company announced that it had "gradually started to withdraw from its Russian assets." It also halted financing for Arctic LNG 2.
Nevertheless, the French company remains heavily involved in cooperation with Novatek. It still holds a 20.02% stake in Yamal LNG, a project located on the opposite side of the Ob Bay from Arctic LNG 2. TotalEnergies also owns 19.4% of Novatek itself.
The company has stated that it has up to $2 billion in annual dividends from its stakes in Novatek and the Yamal LNG project stuck in Russia. Nevertheless, an investigation by Arcadia shows that the French company continued to receive billions of roubles in dividends at least through the end of 2024.
