Shell in talks with Chinese companies to sell stake in Russian gas project

Energy giant Shell is in talks with some Chinese companies to sell its stake in a major Russian gas project as part of sanctions imposed on Moscow over its invasion of Ukraine, The Telegraph reported on Thursday.

The London-listed company is in joint talks with Chinese state-owned oil companies CNOOC Ltd, China National Petroleum Corp (CNPC) and Sinopec over its 27.5% stake in liquefied natural gas venture Sakhalin-2, a said the British newspaper.

Sakhalin-2 is controlled and operated by Russian gas giant Gazprom. Other stakeholders in the project include Japan’s Mitsui & Co and Mitsubishi Corp.

Discussions with Chinese companies include the potential sale of Shell’s stake to one, two or all three companies, the newspaper said, adding that Shell should be open to potential buyers outside of China.

A Sinopec spokesman said he was unaware of the discussion and declined to comment further.

Shell declined to comment on the report, while CNOOC and CNPC did not immediately respond to requests for comment from Reuters.

A person familiar with CNPC’s gas business said China’s state-backed energy firms were following Beijing’s order to be careful and careful when dealing with Russian issues.

“Communication between Chinese companies and Russia at this stage is only focused on trade and the development of new projects,” the person said, adding that the resumption of abandoned projects by Western companies was not an option. ‘agenda.

Another CNPC person also said Chinese companies are unlikely to jump on Shell’s stake.

Shell announced in February that it would quit all of its Russian operations, including the Sakhalin-2 LNG plant, after tougher sanctions against Moscow.

Earlier this month, the company announced that it would write down up to $5 billion following its decision to leave Russia. -Reuter

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