President Vladimir Putin has signed a decree to transfer rights to the Sakhalin-2 natural gas project to a new Russian company, a move that could force foreign owners — including Shell PLC and two Japanese trading houses — to abandon their investment in the facility.
The decree cites threats to Russia’s national interests and economic security, according to a statement dated June 30, issued by the Kremlin and signed by Putin. Stakeholders have one month to say whether they’ll take stakes in the new company, and those who opt out may not be fully compensated, the statement said.
The move could prove complicated for energy giant Shell, which holds a 27.5% stake in the liquefied natural gas facility in Russia’s Far East. The energy giant announced it would exit the project after Russia invaded Ukraine, and also said it wouldn’t commit to any new investments in the country.