PARIS (Reuters) – TotalEnergies announced on Tuesday that it had initiated a force majeure process concerning Arctic LNG 2 due to American sanctions against Moscow, which will allow it not to have to take delivery of volumes of liquefied natural gas (LNG) produced by the Russian project this year.
The United States introduced sanctions in November against Arctic LNG 2, a key element of Russia’s strategy on the global LNG market, where it wants to increase its market share from 8% to 20% by 2030.
“We have initiated the force majeure process in accordance with the contracts in force, and we will respect the applicable sanction regimes in accordance with our principles of action,” TotalEnergies said in a press statement.
“Consequently, no removal of LNG from Arctic LNG 2 by TotalEnergies is planned in 2024,” added the French group.
TotalEnergies, which holds a direct 10% stake in Arctic LNG 2, announced in 2022 its decision to no longer record proven reserves for the project, as well as a provision of 4 billion dollars notably linked to it, due to the uncertainties posed by European sanctions against Moscow linked to the war in Ukraine.
The daily Kommersant indicated at the end of December that the French group and the other foreign shareholders of Arctic LNG 2 – the Chinese state oil majors CNOOC Ltd and China National Petroleum Corp (CNPC), as well as a consortium made up of the Japanese Mitsui and Co and JOGMEC – had declared force majeure.
The project is controlled by Novatek, Russia’s largest LNG producer, which owns 60%.
According to two industrial sources interviewed by Reuters, Arctic LNG 2 should load its first LNG tanker for Asia at the end of January but volumes should be low due to sanctions.
(Reporting by Benjamin Mallet; edited by Nicolas Delame)
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