PARIS (Reuters) - French oil major TotalEnergies (LON:TTEF) said on Friday that it was assessing the impact of U.S. sanctions on the Arctic LNG 2 project in Russia, in which it has a direct 10% stake and a total interest of 21.5% via its holding in Russian gas firm Novatek.
In contrast with other oil majors that have cut ties with the country after its invasion of Ukraine, the French company has held on to several investments in Russia, including minority stakes in liquefied natural gas projects Yamal LNG and Arctic LNG 2.
Before the latest sanctions imposed by Washington on Thursday, it had said it would honour its gas contracts in Russia as long as there were no sanctions against them.
"The consequences of the designation of Arctic LNG 2 as a SDN (special designated nationals) entity by the US authorities on TotalEnergies' contractual commitments to Arctic LNG 2 are currently being assessed," a spokesperson for TotalEnergies said.
The company also said that since March 2022 it had decided to no longer book proved reserves for the Arctic LNG 2 project nor contribute capital to it.
In the first quarter of last year, TotalEnergies booked an impairment of $4.1 billion, concerning notably Arctic LNG 2, out of a total of $14.8 billion in Russia-related asset writedowns for the whole of 2022.
The Arctic LNG 2 plant is located on the Gydan Peninsula and will have three operational lines with a capacity of 6.6 million metric tons of liquefied natural gas each.
Novatek, Russia's largest LNG producer, is the controlling shareholder with a 0% stake and plans to start production by the end of this year. The second and third lines are due to start operations in 2024 and 2026 respectively.
TotalEnergies holds a 19.4% stake in Novatek, which it wrote off last year.
Other shareholders in the LNG project China’s CNPC and CNOOC Ltd as well as Japan Arctic LNG - a consortium of Mitsui & Co, Ltd. and JOGMEC - each holding a 10% stake.