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Shell is holding negotiations to sell its stake in the Sakhalin-2 liquefied natural gas (LNG) plant in Russia to a consortium of Indian energy companies, including ONGC Videsh and GAIL, reported Reuters, citing three sources.

The sale of the 27.5% stake in the LNG plant, which is located on Russia’s eastern flank, comes as the oil firm intends to exit its operations in Russia in the wake of its invasion of Ukraine.

Following its decision to withdraw from all Russian hydrocarbons, Shell took post-tax charges of $3.9bn.

In addition to ONGC Videsh and GAIL, Shell has also urged other state-run companies to bid for the long-term LNG cargoes and crude oil supply deals it has with the Sakhalin-2 project, the sources added.

A potential sale would be subject to approval by Russian authorities, the sources said.

One of the sources said that Shell has currently stopped talks with other companies, including Chinese energy firms, regarding the Sakhalin-2 stake sale.

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By GlobalData

Last month, Reuters reported that the Indian government urged its state-run energy firms to consider acquiring assets in Russia from European energy majors, including BP.

Russian gas company Gazprom operates the Sakhalin-2 LNG plant with a 50% stake. Other partners in the project include Japan’s Mitsui & Co (12.5%), and Mitsubishi (10%).

There is no certainty that a sale deal would be signed by Shell with the Indian consortium.

Shell recently divested its retail stations and lubricants business in Russia, Shell Neft LLC, to Russia’s Lukoil.

Shell’s Russian retail and lubricants assets include the filling stations primarily located in the Central and Northwestern federal districts of Russia, and the lubricants blending plant located in the Tver region.