TotalEnergies announced on Tuesday that it has initiated a force majeure process on the Arctic LNG 2 project in Russia in response to U.S. sanctions. The move comes as a result of sanctions imposed on the project over the conflict in Ukraine in November 2023.
In a statement, TotalEnergies clarified its position, stating, “We have initiated the force majeure process in accordance with existing contracts, and we will comply with applicable sanctions regimes in accordance with our principles of conduct.”
As a consequence of the force majeure declaration, TotalEnergies revealed that no offtake of liquefied natural gas (LNG) from Arctic LNG 2 is planned by the company in 2024. The force majeure process allows the company to suspend its contractual obligations due to unforeseen circumstances beyond its control, such as regulatory actions and sanctions.
The U.S. sanctions on Arctic LNG 2 were implemented in November 2023, targeting the project in response to geopolitical events, particularly the conflict in Ukraine.
The sanctions have had a notable impact on the participation of foreign shareholders in the project, with reports in December suggesting a suspension of their involvement in Arctic LNG 2.