TotalEnergies Ditches Arctic LNG Project Amid Ongoing Russia Sanctions

French energy giant TotalEnergies has officially exited its stake in the Arctic 2 liquefied natural gas project, following Russia's invasion of Ukraine. The company had been involved with Novatek, a Russian oil and gas producer, since 2013 when they jointly launched the massive Yamal natural gas field in Siberia.

TotalEnergies held a 10% stake in Arctic 2, which it transferred to NordLine, a subsidiary of Novatek. The company took a $4.1 billion write-down on its stake in Arctic 2 last year due to the ongoing conflict in Ukraine.

The transfer of TotalEnergies' stake in Arctic 2 has been completed, and the company is no longer a shareholder. However, it still has the right to reimbursement by Arctic 2 for $1.3 billion in loans provided with other shareholders. The repayment is unlikely at this time due to current sanctions against Russia.

TotalEnergies holds a significant stake in Novatek and Yamal, but it cannot sell its Novatek stake given the current sanctions regime against Moscow. TotalEnergies' exit from Arctic 2 marks another step for Western companies isolating their Russian operations following the Ukraine invasion.