TotalEnergies CEO says Arctic LNG 2 stake sale to Novatek unit near completion
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TotalEnergies CEO Patrick Pouyanne said on Thursday the transfer of its 10% stake in the Arctic LNG 2 project to Novatek subsidiary NordLine is expected to be completed in the near term. The announcement follows Russian presidential approval in June for the transaction. TotalEnergies fully impaired its Arctic LNG 2 stake in 2022 amid Western sanctions.
The Stake Transfer
TotalEnergies expects to complete the sale of its 10% stake in the Arctic LNG 2 project to NordLine, a subsidiary of Novatek, in the near term, CEO Patrick Pouyanne said during the company's second-quarter earnings call on Thursday. The transaction was authorized by a special decision of Russian President Vladimir Putin in June. Pouyanne noted that Novatek initiated the discussions and that the stake was fully impaired in 2022, making the disposal mutually beneficial.
Sanctions Impact
The Arctic LNG 2 project, in which Novatek holds a 60% operating stake, has been severely affected by sanctions imposed by the US, EU, and UK. Despite these restrictions, Novatek delivered the second gravity-based structure (GBS) platform to the site on the Gydan peninsula in August 2024, following the first GBS in July 2024. Each GBS has a capacity of about 6.6 million tonnes per annum.
TotalEnergies' Russia Exit
TotalEnergies wrote down its 19.4% stake in Novatek in December 2022 and withdrew its representatives from Novatek's board. In January 2024, the company initiated a force majeure process on the Arctic LNG 2 project. Pouyanne stated that the Arctic LNG 2 chapter will be over for TotalEnergies once the sale is completed, as the company has notified its partners and lenders.
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