Russian President Vladimir Putin has authorized French energy major TotalEnergies to sell its 10% direct stake in the Arctic LNG 2 project to Russian company Nordline. This marks one of the most high-profile Western exits from Russia’s gas sector since the invasion of Ukraine.

Unlike competitors like Shell or BP, TotalEnergies maintained its Russian LNG investments after the war began, arguing sanctions didn’t require full divestment. It still holds a 20% stake in the Yamal LNG project and a 19.4% shareholding in Novatek.

Arctic LNG 2 is heavily sanctioned. While the first production line was completed, the second is only partially done, and construction on the third was halted in 2024 (though Chinese modules were recently shipped to Russia in an attempt to revive it).

The project’s biggest challenge is a severe shortage of specialized Arc7 icebreaking LNG carriers. US sanctions blocked the delivery of many planned vessels, and Russia’s “shadow fleet” lacks the transport capacity needed for full-scale production.

Russia’s older Yamal LNG project remains highly successful and continues to export massive volumes to Europe using international shipping companies. However, upcoming EU restrictions are expected to cut off the European market in the coming months, creating uncertainty for those Western-linked shipowners.