French energy company TotalEnergies has confirmed it will withdraw from the Arctic LNG 2 project in Russia, ending its involvement in the sanctioned liquefied natural gas development.

Chief Executive Officer Patrick Pouyanné announced that the company’s 10% stake will be transferred to Nordline, a subsidiary of Russian gas producer Novatek, which holds the majority interest in the project. The transfer has received approval from Russian authorities and is expected to be completed soon.

According to Pouyanné, Novatek first proposed the transfer after the United States imposed sanctions on the Arctic LNG 2 project in November 2023. He said the decision to relinquish the stake was in the company’s best interest, noting that TotalEnergies had already written down the value of its investment by $4.1 billion in 2022 and declared force majeure on the project the following year.

The company did not disclose whether it would receive any payment for the transfer, and officials declined to comment on the financial terms.

TotalEnergies had retained interests in several Russian LNG projects despite Western sanctions following Russia’s invasion of Ukraine. However, the European Union is set to prohibit the import and resale of Russian LNG from 2027, prompting companies to reassess their positions.

Since the outbreak of the war, several international firms have either sold their Russian assets or seen them taken over by the Russian government. In 2024, state-controlled energy company Gazprom acquired Shell’s former stake in the Sakhalin II LNG project after a presidential decree, with Shell recording a multibillion-dollar impairment on the investment.