With a 60% stake, Novatek is the largest shareholder in the project. Credit: Novatek.

TotalEnergies is assessing the impact of the latest sanctions imposed by the US on Russia’s Arctic LNG 2 project, reports Reuters.

The French oil and gas major directly owns a 10% stake in the Russian liquified natural gas (LNG) project and a total of 21.5% via its shareholding in Novatek, a Russian gas company.

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Following Moscow’s decision to invade Ukraine, major oil companies severed their relations with Russia.

However, TotalEnergies held on to some of its investments in Russia, including minority shares in LNG projects Yamal LNG and Arctic LNG 2.

Last week, the Office of Foreign Assets Control of the US Department of the Treasury placed the Arctic LNG 2 project under the Specially Designated Nationals (SDN) list.

Prior to the most recent sanctions imposed by Washington, TotalEnergies stated that it would fulfil its gas contracts with Russia so long as those contracts were unaffected by sanctions.

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“The consequences of the designation of Arctic LNG 2 as an SDN entity by the US authorities on TotalEnergies’ contractual commitments to Arctic LNG 2 are currently being assessed,” a representative for TotalEnergies was quoted as saying.

Additionally, the business disclosed that as of March 2022, it had chosen not to continue to book proved reserves for the Arctic LNG 2 project or provide financial support for it.

Out of a total of $14.8bn in asset writedowns connected to Russia for the entirety of 2022, TotalEnergies recorded an impairment of $4.1bn (€3.8bn) in the first quarter of 2022, primarily related to Arctic LNG 2.

Located in the Gydan Peninsula, the Arctic LNG 2 project will feature three LNG trains, each with 6.6 million tonnes per annum capacity.

With a 60% stake, Novatek is the largest shareholder in the project, which is expected to start production by the end of 2023.

Other partners in the project include China National Offshore Oil Corporation, China National Petroleum Corporation, Mitsui & Co., and JOGMEC.