TotalEnergies says no change to Russian Novatek, LNG projects despite BP, Shell moves

TotalEnergies said March 1 it supported sanctions in response to Russia's invasion of Ukraine and would not invest in new Russian energy projects, but that it would maintain its role in Russia's largest LNG production facilities, Yamal LNG and Arctic LNG 2.

In a statement, TotalEnergies condemned Russia's actions in Ukraine and said it would abide by sanctions regardless of the consequences for its own business.

However, it did not follow European peers BP, Shell and Equinor in announcing a cut in Russian ties.

"TotalEnergies condemns Russia's military aggression against Ukraine, which has tragic consequences for the population and threatens Europe," the company said.

"TotalEnergies expresses its solidarity with the Ukrainian people who are suffering the consequences and with the Russian people who will also suffer the consequences," it said, adding it was "mobilized" to provide fuel to the Ukrainian authorities and aid to Ukrainian refugees.

"TotalEnergies supports the scope and strength of the sanctions put in place by Europe and will implement them regardless of the consequences (currently being assessed) on its activities in Russia," it said, adding it would "no longer provide capital for new projects in Russia."

TotalEnergies has helped pioneer Russia's growing LNG production hub in Yamal-Nenets in northwest Siberia, both through direct project stakes and its 19.4% stake in Russia's Novatek. This has involved a change in financing arrangements after earlier US sanctions prohibited the provision of long-term dollar financing to Novatek, one of a series of measures aimed at Russia's energy sector following the 2014 annexation of Crimea.

TotalEnergies made no mention of Novatek or the LNG projects in its latest comments.

Commenting on fourth quarter results on Feb. 10, CEO Patrick Pouyanne underlined the likely price consequences of any escalation of sanctions against Russia, a point US authorities have appeared to acknowledge in granting temporary sanctions exemptions for energy trades.

"The consequence of any energy sanctions on Russia -- globally the company is winning because the impact on oil prices and gas prices will be huge," Pouyanne said at the Feb. 10 event.

The currently operating Yamal LNG project has 17.5 million mt/year of capacity, and the Arctic LNG 2 project, scheduled to start exporting in 2023, will have 19.8 million mt/year of capacity.

TotalEnergies' other Russian activities include a stake in the Termokarstovoye field alongside Novatek and a 20% stake in the Kharyaga oil field. In 2020 the company's Russian production share amounted to 478,000 b/d of oil equivalent, most of which was gas.