Published by Jessica Weisman-Pitts
Posted on May 26, 2022
3 min readLast updated: February 6, 2026
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By Ron Bousso and Nidhi Verma
LONDON (Reuters) -Shell is in talks with a consortium of Indian energy companies to sell its stake in a major liquefied natural gas plant in Russia, three sources told Reuters, highlighting India’s willingness to step into the space left by Western companies following Moscow’s invasion of Ukraine.
The world’s third-largest oil importer and consumer has already stepped up purchases of Russian supplies since the conflict began in February, taking advantage of big discounts at a time when global oil prices have surged.
The sources said Shell has recently entered into talks with a group of Indian companies, including ONGC Videsh and Gail, over its 27.5% stake in the Sakhalin-2 LNG plant on Russia’s eastern flank.
Shell declined to comment. ONGC, Gail and other state-run Indian companies did not respond to Reuters’ request for comment.
The talks follow the British company’s plans to exit all its Russian operations, amid an exodus of Western companies from the country in response to sanctions over the Ukraine conflict. India has not explicitly condemned Moscow’s actions there.
India has snapped up cheap Russian oil, taking its share of Russian oil exports to around 10% from zero since the start of this year, according to the International Energy Agency.
The Indian government has also asked state-run energy companies to look into buying Russian assets from European oil majors including BP, Reuters reported last month.
India has shrugged off criticism from the West and defended its Russian energy purchases, saying they represent a fraction of the country’s overall needs and a sudden halt to imports would push up prices for consumers.
INDIA’S LNG PLANS
Shell is also asking the Indian group for separate bids for long-term deals it has with Sakhalin-2 to supply the consortium with LNG cargoes and crude oil, two of the sources said.
India does not currently purchase much LNG from Russia but aims to increase sharply its gas consumption over the coming decades.
It was unclear if the talks between Shell and the Indian consortium will lead to a deal, whose value remains unclear after Shell took a writedown on its Russian assets.
The world’s largest liquefied natural gas trader wrote down $3.9 billion on Russian assets after its decision to leave.
Any sale agreement would also require Moscow’s approval, the sources said.
Shell is currently not in talks with other companies, including Chinese energy groups, on selling the Sakhalin-2 stake, one of the sources said.
Sakhalin-2 is controlled and operated by Russian gas company Gazprom. Other stakeholders in the project include Japan’s Mitsui & Co and Mitsubishi Corp.
Shell earlier this month agreed to sell its Russian retail and lubricants businesses to Lukoil.
Moscow calls its Ukraine invasion a “special military operation” to rid the country of fascists, an assertion Kyiv and its Western allies say is a baseless pretext for an unprovoked war.
(Reporting by Ron Bousso and Nidhi Verma; Editing by Veronica Brown and Jane Merriman)
Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, making it easier to store and transport. It is primarily used for heating, electricity generation, and as a fuel for vehicles.
A stake in a company refers to ownership interest or shareholding in that company. It represents a claim on the company's assets and earnings, and stakeholders can benefit from dividends and appreciation in value.
Sanctions are penalties or restrictions imposed by countries or international organizations to influence a nation's behavior. They can include trade barriers, tariffs, and restrictions on financial transactions.
A consortium is a group of individuals or organizations that come together to collaborate on a specific project or business venture. Members share resources, risks, and profits associated with the project.
A writedown is an accounting action that reduces the book value of an asset when its market value declines. This reflects a loss in value and can impact a company's financial statements.
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