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France’s TotalEnergies Exits Arctic LNG 2 - But Russian Ties Endure
France’s TotalEnergies has exited Russia’s sanctioned Arctic LNG 2 project, but European companies remain deeply involved in the country’s Arctic gas industry, highlighting the slow and uneven unwinding of commercial ties between Europe and Russian energy.
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TotalEnergies said on Thursday it had completed the transfer of its 10% stake in Arctic LNG 2 to NordLine, a subsidiary of Russian gas producer Novatek. The move ends its direct ownership of one of Russia’s most ambitious Arctic energy projects.
But the departure does not mark a complete break with Russian LNG for Total or other EU-based firms.
The French company continues to own 20% of Yamal LNG, Russia’s largest Arctic LNG project, and holds a 19.4% stake in Novatek, Yamal’s majority owner. It also continues to market Yamal LNG cargoes through its British trading operation.
Chief Executive Patrick Pouyanne said last month that TotalEnergies earns about $400 million a year from selling LNG from Yamal, although the figure varies with oil prices.
“Some cash has come back to TotalEnergies, not the full of that,” Pouyanne said in July, referring to dividends and other distributions from the Yamal project.
Other Western companies also remain involved in the Arctic LNG supply chain
European sanctions have restricted the ability to transfer money from Russia to Europe.
Ties to Russian energy remain
Other Western companies also remain involved in the Arctic LNG supply chain, particularly shipping.
Greek shipowner Dynagas operates Arc7 ice-class LNG carriers serving Yamal LNG, while U.S.-based Seapeak is also involved in transporting Russian LNG. The specialized vessels are critical to moving cargoes through Arctic waters and require specialized maintenance facilities.
That dependence has kept European maritime infrastructure connected to Russia’s Arctic LNG trade even as governments tighten sanctions.
Danish shipyard Fayard is the last EU yard servicing the specialized Arc7 fleet after French shipbuilder Damen stopped accepting the vessels at its Brest facility in 2025.
A third Russia-linked Arc7 tanker is now heading to Fayard for maintenance, according to environmental group Urgewald, amid growing criticism from European lawmakers.
More than 100 parliamentarians from 17 European countries have called on Fayard to stop servicing the vessels, arguing that maintenance performed before new EU restrictions take effect could keep the fleet operating for years.
Fayard has defended the work as legal under current EU rules and said it complies with applicable sanctions.
Incrementally exiting Russia
The dispute illustrates the gap between Europe’s political objective of ending its dependence on Russian gas and the commercial infrastructure that continues to support the trade.
While the bloc will ban Russian LNG imports starting in January 2027, the latest sanctions package also introduced a temporary exemption for certain transfers of Russian LNG to third countries, subject to reporting and volume requirements.
The distinction is significant.
The rules therefore do not amount to an immediate prohibition on European companies providing services connected to Russian LNG or transporting cargoes to markets outside the EU.
For Russia’s Arctic LNG industry, the distinction is significant. Yamal LNG continues to depend on specialized Western-built vessels, European maritime infrastructure and international shipping companies, even as the EU moves toward a gas import ban.
Against that backdrop, TotalEnergies’ departure from Arctic LNG 2 represents another step in the retreat of Western energy companies from Russia, but one that has taken years to complete.
TotalEnergies had already effectively written off its investment. Shortly after Russia’s invasion of Ukraine, the company recorded a $4.1 billion impairment in 2022, including a full write-down of its Arctic LNG 2 interest.
After the United States sanctioned Arctic LNG 2 in November 2023, TotalEnergies suspended its contractual rights and obligations relating to the project and ceased accounting for its ownership stake
The company’s latest transaction was therefore largely the formal completion of a process that began years ago.
Retaining financial claims
TotalEnergies will nevertheless retain a financial claim on Arctic LNG 2. As part of the transfer, it keeps its right to repayment of about $1.3 billion. The company said repayment could take place in the future, depending on the sanctions applicable at the time.
The company therefore leaves Arctic LNG 2 with its equity interest gone but with money still potentially tied up in Russia.
Its continuing Yamal stake, meanwhile, means TotalEnergies has not left Russia’s Arctic gas sector altogether.
The result is an increasingly fragmented landscape: Western energy companies are unwinding direct investments in sanctioned Russian projects, while European-linked shipowners, traders and maritime service providers remain connected to projects such as Yamal LNG.
TotalEnergies may have exited Arctic LNG 2, but the broader European commercial involvement in Russia’s Arctic energy industry is proving considerably harder to dismantle.
