Russia’s Gazprom PJSC will reportedly increase its ownership of Sakhalin 2 LNG project, placing more of the country’s export capacity under state-owned company’s control as sanctions continue to pressure its oil and pipeline gas revenues.

According to the Russian government, a 27.5% stake valued at $1.6 billion is to be sold to Gazprom, increasing its interest in the liquefied natural gas project to 78%. The share, previously owned by Shell plc, was expected to go to Russia’s largest LNG producer, privately held Novatek PJSC.

A Shell spokesperson told Reuters that the producer “reserves all its legal rights” from the stake. However, Shell had no comment about Russia’s actions. Shell last year wrote down its investment in the 11.5 million metric tons/year facility...