China wants to enter after Shell left Russia, according to the media

Talks are underway for Chinese state-run energy companies to purchase Sakhalin-2 from the UK energy giant.



China's largest state-owned energy firms are allegedly in talks with Shell to get a stake in a significant Russian gas export project after Shell withdrew from Russia due to the conflict in Ukraine.


Bloomberg cites persons familiar with the situation as saying that Cnooc, CNPC, and Sinopec Group are in collaborative negotiations with Shell regarding the company's 27.5% interest in the Sakhalin-2 liquefied natural gas project.


The sale of the interest to one or two of the Chinese companies, or a consortium of all three majors, is a topic of discussion in the early stages. The individuals, who wished to remain unnamed, informed the media that Shell is also open to discussions with other prospective purchasers outside of China.


Shell said in March that it will be ending its joint ventures with Gazprom, the state-run gas company of Russia, and affiliated companies. The choice comes after similar actions were revealed by Total, a French company, BP, a British company, and Equinor ASA, a Norwegian company. Later, the business announced that the exit would require it to write off up to $5 billion in assets.


The automobile sector in China is also interested in the potential in Russia. A source in government agencies was quoted by TASS as saying that one of the Chinese automakers may purchase Renault's ownership interest in the Russian automaker Avtovaz. In a joint venture with Rostec, Lada Auto Holding, which controls 100% of Avtovaz, Renault has a 68% stake.


Major multinational brands left Russia in large numbers as a result of sanctions imposed by the West over Moscow's military campaign in Ukraine, which began on February 24.


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