Totalnergies announces “the start of a decline” for its megachanta gas in Russia

The project of gigantic Liquefied Natural Gas Factory Arctic LNG 2, in Siberia, could be stopped net.

Le Monde

Two months and three days after the start of the war in Ukraine, Western sanctions against Russia lead Totalenergies (ex-Total) to start “the start of a decline”, according to a spokesperson. Wednesday, April 27 in the evening, the Pétrogazière company announced a depreciation of assets of around 4.1 billion dollars (3.9 billion euros), in particular for the megaprojet gasier Arctic LNG 2. supposed to enter into Production from 2023, the gigantic liquefied natural gas plant, located on the gydan peninsula, in northern Siberia, could be stopped net.

Totalnergies thus provides for a premature withdrawal from the site, the binding to register the provision on her accounts of the first quarter 2022, presented on April 28. Without this programmed subtraction of $ 4.1 billion, the company recorded an adjusted net profit of $ 9 billion. Three times more than at the same period of 2021.

Since February 24, the Russian attack on Ukrainian soil has drawn the prices of oil and gas upwards, amplifying the effects of the high resumption of economic activity of 2021. A general tension in the sector of Hydrocarbons. “Consumer countries and markets fear possible risks on future oil and gas supplies, recalls Francis Perrin, director of research at the Institute of International and Strategic Relations, in Paris. Especially since the organization of countries Oil exporters and its allies, including Russia, maintain an unchanging roadmap, as if the war did not exist. “

central strategic place

To justify his withdrawal of Arctic LNG 2, Totalenergies highlights Western sanctions against Russia. These “weigh additional risks on the project’s execution capacity,” said a statement from the company. Since April 8, the European Union has prohibited, for example, to its member states from exporting goods and technologies necessary for the liquefaction of natural gas in Russia.

On March 22, the company had already indicated its choice to no longer record proven reserves as an Arctic LNG 2, “taking into account the uncertainties that technological and financial sanctions weigh on the ability to carry out the project under construction “. For the moment, it holds 21.6 % of the project, in particular by its presence in the capital of the Russian private group Novatek. On the other hand, Totalenergies remains until then very present in the neighboring field, that of Yamal.

The country occupies a central place in the group’s industrial strategy: to bet more and more on gas, presented as less harmful energy than coal and therefore as a possible alternative for the Chinese market. Russia alone represented 31.5 % of the firm’s gas production in 2021.

Unlike other heavy goods vehicles in hydrocarbons (BP, Shell, Equinor, Exxon), the multinational therefore refuses to announce a withdrawal of all its Russian active ingredients, despite strong pressure on the part of ‘Environmental NGOs or politicians. In the middle of the presidential campaign, in March, the environmental candidate, Yannick Jadot, had gone so far as to accuse the business of “complicity of war crimes” for his refusal to leave Russia. “Abandoning these participations without financial compensation would contribute (…) to enrich Russian investors,” replied the company, while announcing defamation proceedings.

/Media reports.