TotalEnergies discusses transfer of Russian Arctic LNG 2 stake

French energy company TotalEnergies said on Thursday that it could soon transfer its 10 percent stake in the Arctic LNG 2 liquefied natural gas project, which has been hit by US sanctions, to majority shareholder Novatek.

The sale would reduce, but not end, TotalEnergies' involvement in Russia. The company still holds a stake in another Arctic LNG field and shares in Novatek.

Chief executive Patrick Pouyanne told a presentation of the company's quarterly results that TotalEnergies had been approached by Novatek and was discussing a transfer of its 10 percent stake in Arctic LNG 2 to NordLine, a Novatek subsidiary.

After Russia's 2022 invasion of Ukraine, most Western companies quickly sold or isolated their Russian operations and holdings, as Western sanctions made trade in many goods difficult. Russia has since made it difficult for companies to leave by requiring presidential authorisation for deals. Pouyanne said TotalEnergies received that authorisation last month.

Pouyanne said TotalEnergies had notified its partners and lenders and expected the transfer process started by Novatek to be completed in the near term. He said the transfer was in the interests of both companies.

TotalEnergies wrote down the value of its Arctic LNG 2 stake by $4.1 billion in 2022.

Novatek was founded in 1994 and has been TotalEnergies' main partner in Russia. The companies jointly launched the large Yamal natural gas field in Siberia in 2013, shipping LNG from there to Europe. TotalEnergies holds a 19.4 percent stake in Novatek and a 20 percent stake in Yamal.