Russian President Vladimir Putin has authorised France's TotalEnergies to sell its 10 per cent stake in the Arctic LNG 2 project to Russian company Nordline, reported Ventura, California's gCaptain.

Arctic LNG 2 has been hampered by Western sanctions, vessel shortages, and export restrictions, preventing the project from reaching its planned capacity despite billions of dollars invested.

TotalEnergies has been a close partner of Novatek for more than a decade. In addition to its Arctic LNG 2 stake, the French firm owns 20 per cent of Yamal LNG and holds 19.4 per cent of Novatek. When it acquired its Arctic LNG 2 stake in 2019, its combined interest was estimated at 21.6 per cent.

The project was designed to produce 19.8 million tonnes of LNG annually from three trains, supported by Arc7 icebreaking carriers along the Northern Sea Route. Unlike BP, Shell, and ExxonMobil, TotalEnergies retained its Russian LNG investments after the Ukraine war, arguing that sanctions did not prohibit ownership.

Arctic LNG 2's first train was completed but constrained by sanctions. The second train is partly finished, while construction of the third has been suspended since 2024. Recent fabrication modules shipped from China may allow work to resume.

Shipping remains the biggest obstacle. US sanctions halted the delivery of many Arc7 carriers, leaving Novatek short of specialised tonnage. Russia has assembled a shadow fleet, but analysts say capacity is far below requirements for full-scale output.

Yamal LNG continues exporting cargoes with an established Arc7 fleet operated by Seapeak and Dynagas. European buyers have sustained record imports, but pending EU measures will soon block Russian LNG, raising uncertainty for Western-linked shipowners.

Industry observers say TotalEnergies' exit may set a precedent for other Western stakeholders. Pressure could grow on shipping firms to divest, transfer vessels, or restructure ownership as Moscow seeks to preserve exports from Yamal LNG and Arctic LNG 2.