TotalEnergies Arctic LNG 2: Putin authorizes the transfer of 10% to NordLine LLC, a Novatek subsidiary holding 60% of the project, via a decree signed on June 3, 2026.
TotalEnergies: no revenue since 2022, with $4.1 billion in impairments
The French company recorded a $4.1 billion impairment on its stake in TotalEnergies Arctic LNG 2 following Russia’s invasion of Ukraine and has consistently stated that it receives no revenue from the project. However, unlike BP, Shell, and ExxonMobil—which divested from Russia at the start of the war—TotalEnergies maintained its exposure for more than four years before obtaining government authorization to exit. The company also holds a 20% stake in Yamal LNG—an operating project not directly sanctioned—and a 19.4% stake in Novatek.
“TotalEnergies’ potential exit from Arctic LNG 2 could become a test case for other Western shareholders still tied to Russia’s Arctic LNG industry,” noted an analysis by gCaptain published the same day as the decree. Japan Arctic LNG, CNOOC, and CNPC—each with 10%—also remain in the project.
TotalEnergies Arctic LNG 2: a project designed for 19.8 Mt/year and its operation under sanctions
TotalEnergies Arctic LNG 2 was designed to produce 19.8 million metric tons of LNG per year through three liquefaction trains. The first train is completed but operates under restrictions due to sanctions; the second has only one production string completed; and construction of the third was suspended in 2024. According to gCaptain, fabrication modules for the third train recently departed China bound for Russia, suggesting that Novatek is attempting to restart work after the prolonged standstill.
The biggest operational obstacle for TotalEnergies Arctic LNG 2 remains transportation: the project was designed for a fleet of Arc7 icebreakers that largely was not delivered due to the impact of U.S. sanctions. Cargoes produced to date have only reached a port in southern China, using vessels from a shadow fleet assembled by Russia.
Russian strategy: consolidating Arctic LNG toward Asia
Putin’s authorization has a clear geopolitical logic: with the European Union required to eliminate all purchases of Russian gas before 2027, Moscow needs to pivot its LNG exports toward Asia. Consolidating Novatek’s control over Arctic LNG 2 streamlines the commercial decision-making chain for that repositioning. The transfer also removes the risk that the presence of a Western shareholder subject to sanctions could complicate contract negotiations with Asian buyers.
The move adds further pressure on the Japanese companies still participating in the project. gCaptain analysts warn that “pressure could grow on shipping companies and vessel operators with exposure to Russia’s Arctic supply chain to divest assets or restructure ownership arrangements.”
The impact of sanctions on Russian LNG projects and the global competition for liquefaction capacity are analyzed in Inspenet’s Midstream news section. The geopolitical context of the global energy market can be found in Inspenet’s Oil and Gas section.
The resolution of the TotalEnergies Arctic LNG 2 case sets a precedent for the global energy sector. Russia’s ability to keep projects operating under international sanctions, even at reduced scale, demonstrates the resilience of its LNG infrastructure and raises questions about the long-term effectiveness of Western restrictive measures against strategic Arctic assets.
Sources: World Oil – Putin approves TotalEnergies exit from Arctic LNG 2 | gCaptain – Putin Clears TotalEnergies Exit From Arctic LNG 2
