Shell to exit Russia's Sakhalin-2 LNG project empty-handed

Sep. 01, 2022 3:57 PM ETShell plc (SHEL)MITSY, OGZPY, MIELY, MITSF, MIELFBy: Carl Surran, SA News Editor82 Comments

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Shell (NYSE:SHEL) will exit Russia's Sakhalin-2 liquefied natural gas project with nothing after President Putin officially transferred the facility to a new operating company, Bloomberg reported Thursday.

Shell had written off the $1.6B value of its 27.5% stake in Sakhalin-2 earlier this year.

The company has a contract to receive LNG cargoes from the facility, and is assessing "options in line with applicable legal requirements and agreements" as the venture is transferred to the new operator.

The other foreign participants in Sakhalin-2, Japan's Mitsui (OTCPK:MITSY) and Mitsubishi (OTCPK:MIELY) agreed this week to transfer their respective 12.5% and 10% stakes to the newly established company; Gazprom (OTCPK:OGZPY), the remaining partner, holds 50% of the current operator.

Putin also has issued a decree that blocks Exxon Mobil from selling its interest in the Sakhalin-1 oil project until the end of the year.

Exxon reportedly has told Russian officials it will sue the federal government unless it allows the company to exit the project.

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