Russian President Vladimir Putin has authorised the acquisition of TotalEnergies’ 10% stake in the Arctic LNG 2 project by Nordline Ltd., a wholly owned subsidiary of Novatek, paving the way for the Russian gas producer to increase its ownership in the sanctions-hit development to 70%.
The approval was granted under a presidential decree issued in August 2022 that requires special authorisation for transactions involving strategic energy assets and investors from countries deemed “unfriendly” by Moscow.
Following completion of the transaction, Novatek will hold a 70% stake in Arctic LNG 2, while China’s CNPC and CNOOC, along with a Japanese consortium comprising Mitsui & Co. and JOGMEC, will each retain 10%.
The move marks another step in the restructuring of ownership in Russia’s energy projects following Western sanctions imposed after the outbreak of the conflict in Ukraine. TotalEnergies suspended new investments in Arctic LNG 2 in 2022 and subsequently wrote off its stake in the project. The French energy major acquired the 10% interest for $2.55 billion in 2019 and also held an option to increase its participation should Novatek reduce its ownership.
Despite exiting Arctic LNG 2, TotalEnergies remains one of Novatek’s largest foreign investors, holding a 19.4% stake in the Russian LNG producer and maintaining its participation in the Yamal LNG project.
Arctic LNG 2 is Novatek’s flagship expansion project and the company’s second major LNG development in the Russian Arctic after Yamal LNG. The project is designed to comprise three liquefaction trains with a combined annual capacity of 19.8 million tonnes of LNG.
Feed gas is supplied from the nearby Utrenneye field, which contains an estimated 1.4 trillion cubic meters of natural gas and 90 million tonnes of liquid hydrocarbons. Total project investment is estimated at approximately $21 billion.
Originally, Novatek planned to launch the first LNG train in late 2023, followed by the second in 2024 and the third in 2026. However, Western sanctions targeting Russia’s energy sector disrupted access to key liquefaction technologies, equipment, and financing, forcing the company to revise its development schedule and accelerate efforts to localise critical technologies.
Novatek reported the first LNG shipment from Arctic LNG 2 in September 2025, although the project continues to face operational and commercial challenges linked to sanctions and restrictions on LNG transportation.
Industry analysts view the latest transaction as an effort by Novatek to simplify the project’s ownership structure while preserving its long-term relationship with TotalEnergies. Given TotalEnergies’ continued investment in Novatek and Yamal LNG, analysts say the French company appears focused on reducing its exposure to Arctic LNG 2 rather than pursuing a broader withdrawal from Russia’s LNG sector.
Some Russian energy analysts have also suggested that Chinese investors could eventually seek to increase their participation in Arctic LNG 2 as Beijing continues to diversify its natural gas supply sources. Such a move would further strengthen the project’s orientation toward Asian markets at a time when access to European customers remains constrained. The issue may have been discussed during President Putin’s visit to China in May, when Novatek’s largest shareholders, Leonid Mikhelson and Gennady Timchenko, joined the Russian delegation. However, no details of potential negotiations regarding Arctic LNG 2 ownership have been disclosed.
The Eurasian Links 