Technip Energies shares plummet after Le Monde report on supplies to Russian gas project

(Reuters) -Technip Energies shares plummeted on Thursday after French newspaper Le Monde said the oil and gas company may have failed to comply with European Union sanctions against Russia by continuing to supply equipment to a Russian gas project.

Technip Energies said in a statement after its shares fell as much as 22% that it had always respected international sanctions and its contractual obligations regarding the Arctic LNG2 project in Russia.

Shares in the company, which specialises in engineering and technology for the energy industry, shed 18.4% by 1439 GMT and were set for their biggest one-day drop ever, with a trader and an analyst pointing to the Le Monde story as the reason for the drop.

Le Monde said Technip Energies had supplied equipment to the Russian Arctic LNG 2 project between August and October 2022 despite EU sanctions that prohibited the sale, supply, transfer, or export of goods and technology suited for use in oil refining and liquefaction of natural gas to any entity or body in Russia.

In its article, Le Monde quoted the company as saying it had not violated the sanctions as the components it delivered to the project were not strategic and were not covered by the EU ban.

Arctic-2 is led by Russian firm Novatek which holds a 60% stake. Other shareholders include French energy major TotalEnergies, China’s CNPC and Japan Arctic LNG – a consortium of Mitsui & Co, Ltd. 8031.T and JOGMEC – each holding 10% stake.

In July this year, Technip said it had completed its exit from the Arctic LNG 2 project during the second quarter of 2023 without any negative net financial exposure, having signed an exit framework agreement in October last year.

It had previously said Western sanctions against Russia would reduce its involvement in the project.

“$800 million of market cap came off, it’s a very harsh response, and suggests the news scared investors out there,” the analyst, who spoke on condition of anonymity, said.

Arctic LNG 2, located on the Gydan peninsula, is set to start operations this year. Before Russia’s invasion of Ukraine it had been expected to reach full production capacity of almost 20 million tonnes of liquefied natural gas a year in 2026.

(Reporting by Piotr Lipinski, Nathan Vifflin in Gdansk, Benjamin Mallet in Paris, editing by Silvia Aloisi)