France signs off on joint investment initiatives with Russia

As part of the St Petersburg International Economic forum (SPIEF), which is presently in progress, France has agreed to several investment projects in cooperation with Russian firms as the French President, Emmanuel Macron, visits Russia as a guest of honor at the forum.

The French gas and oil firm Total, which recently announced that it was ending its operations in Iran due to US sanctions against the Middle Eastern country, has agreed to purchase a 10% stake in the Arctic Liquefied Natural Gas-2 project.

TASS reports:

STRELNA, May 24. /TASS/. Novatek and Total signed an agreement in respect of participation of the French company in Arctic LNG 2 project. The document was signed after talks between Russian President Vladimir Putin and France’s President Emmanuel Macron in their presence.

Arctic LNG 2 is the second liquefied natural gas plant of Novatek to be launched in 2023. Its capacity will be over 18 mln tonnes of LNG per year.

Novatek will sell the share of 10% in the Arctic LNG 2 project to France’s Total, Chief Executive Officer of Novatek Leonid Mikhelson told reporters on the sidelines of the St. Petersburg International Economic Forum (SPIEF).

“Total will participate with the share of 10%,” Mikhelson said.

Novatek plans to keep the 60% stake in the project, the top manager said.

“We plan to hold the share of 60%. If we decide to reduce the share, but not less than 50% in the project, then Total will have the right to increase its stake to 15%,” Mikhelson added.

The cost of the Arctic LNG 2 project is about $25.5 bln, the top manager noted. This figure is indicated in the agreement for sale of 10% in the project to Total.

The Russian company plans to close the deal as early as in the first quarter of 2019, Novatek said.

The prospect of nuclear cooperation is also on the table, as the economic forum progresses. RT reports:

Russia’s atomic agency Rosatom and the French Alternative Energies and Atomic Energy Commission have signed a strategic paper on partnership in cooperation in the field of use of peaceful atomic energy.

Rosatom head Aleksey Likhachev has also teased a $1 billion Russian-French deal on the regeneration of used nuclear fuel, which may be signed during the ongoing St. Petersburg International Economic Forum (SPIEF).

The joint initiatives are agreed upon at a time when the EU, and US, maintains economic sanctions against Russia, including on Russian energy firms. Sanctions have been a major focus for European firms as of late, as the US is reimposing economic sanctions against Iran, following POTUS Donald J. Trump’s withdrawal from the 2015 multilateral nuclear accord on Iran’s nuclear enrichment program, as the EU and its members continue to search for ways to work around American sanctions in order to preserve economic ties with Iran, and hopefully maintain the nuclear agreement, to which the EU, and several of its members, are signatories.

Other oil and LNG initiatives that European nations are mulling include the North Stream 2 project, which will provide a pipeline from Russia to Germany, as well as others. German Chancellor Angela Merkel has recently visited with Russian President, Vladimir Putin in Sochi, to address Russia’s role in Syria, together with the ongoing conflict in the Ukraine, as well as the preservation of the JCPOA agreement on Iran’s nuclear program. Merkel seems intent on seeing the project through, however Washington has been on a quest to sabotage it, both in an effort to damage Russian cooperation in Europe, as well as to open up European markets to American imported shale gas.