TotalEnergies Closes Arctic LNG 2 Exit With $1.3 Billion Claim Outstanding
The French major transferred its impaired 10% stake to Novatek's NordLine on August 27, leaving a $1.3 billion loan claim against a sanctioned entity.
TotalEnergies completed the transfer of its 10% stake in Russia's Arctic LNG 2 to NordLine, a subsidiary of project operator Novatek, on Thursday (2026-08-27), formally severing a relationship that had been in legal suspension since Western sanctions froze the project.5,6
The stake had been worthless on TotalEnergies' accounts for years. The company wrote off the entire $4.1 billion position in 2022 after UK, EU and US sanctions hit the 27 bcm/year Siberian project, freezing its role there. Chief executive Patrick Pouyanné confirmed the writedown figure on an earnings call in July (2026-07), a month before the transfer was completed.6
Formal Russian authorization came on Wednesday (2026-06-03), when President Vladimir Putin signed a Kremlin order approving the transaction, as Montel reported, citing Russia's Pravno legal news site. Nearly three months elapsed between that approval and the completed transfer at the end of August, pointing to the complexity of unwinding a sanctioned cross-border stake.1,6
But the exit is not clean. Under the transfer agreement, TotalEnergies retains the right to be reimbursed approximately $1.3 billion for its share of the shareholder loans provided to Arctic LNG 2 during the project's development phase. That claim now sits against a sanctioned project operated by a sanctioned company, and TotalEnergies has given no indication of when, or whether, it expects to recover the money.6
Pouyanné noted in July (2026-07) that Novatek had approached TotalEnergies to initiate the deal, not the other way around. TotalEnergies moved immediately to suspend its rights and obligations under Arctic LNG 2 contracts once Western sanctions landed. Remaining a formal shareholder with all activity frozen still created disclosure requirements and potential sanctions exposure that the completed transfer now ends.6
Arctic LNG 2 was designed to produce 27 bcm per year from Russia's Gydan Peninsula, placing it among the larger LNG export projects globally when it was conceived. Western sanctions cut off the financing and technical partnerships it needed. Novatek has continued development without its former Western partners, but the project's production trajectory and timeline remain uncertain.1
For TotalEnergies, the transfer carries no fresh financial consequence. The $4.1 billion was written off four years ago, and the project had been generating no contracted volumes for the company since the suspension. Its global LNG portfolio stood at approximately 44 Mtpa in 2025, a scale that made Arctic LNG 2 a peripheral position even before it was impaired.6,2
The strategic direction is away from Russia. On Thursday (2026-07-09), TotalEnergies dispatched the first cargo from the Energia Costa Azul LNG Phase 1 terminal in Baja California, Mexico, shipping US-sourced gas to Asian buyers via the Pacific route. The company holds a 16.6% stake in the project alongside operator Sempra Infrastructure and has a 20-year offtake agreement for 1.7 Mtpa once the terminal reaches commercial operations. ECA Phase 1's single liquefaction train has a nameplate capacity of 3.25 Mtpa.3,2,4
The $1.3 billion reimbursement claim is all that remains of the Arctic LNG 2 relationship. Whether Novatek or the project itself can legally and practically service that debt — given the sanctions environment and the project's uncertain output trajectory — is the only exposure TotalEnergies carries in a venture it has otherwise left entirely.6