MOSCOW, March 26 (Reuters) - Kremlin-controlled energy

giant Gazprom has acquired a 27.5% stake, formerly

owned by Shell, in Russian liquefied natural gas (LNG)

producer Sakhalin Energy for around $1 billion, according to a

government order.

The government also officially nullified its order a year

ago on selling the stake to Gazprom's rival, Novatek,

without explanation.

The Russian government said late on Monday that the 27.5%

stake in Sakhalin Energy is due to be sold to a company called

Sakhalin Project for 94.8 billion roubles ($1.02 billion).

Sakhalin Project is fully owned by Gazprom, company filings

showed. Gazprom declined additional comments, while Novatek did

not immediately respond to a request for comment.

Gazprom owns 50% in Sakhalin Energy located in the southern

tip of Russia's Pacific island of Sakhalin. Other shareholders

are Japanese companies Mitsui ( MITSF ) (12.5%) and Mitsubishi ( MSBHF )

(10%).

Following Moscow's decision to send troops into Ukraine in

February 2022, Shell said it would quit the project, in which it

held a stake worth 27.5% minus one share.

The company booked a $1.6 billion impairment related to the

Russian LNG project in the first quarter of 2022. Shell was not

immediately available for comment.

Sources have said Shell believed there was a risk Russia

would nationalise foreign-held assets, while Russian President

Vladimir Putin has repeatedly said Moscow would retaliate

against the United States and its allies for freezing Russian

assets and other sanctions.

In June 2022, the Sakhalin-2 operating company was

transformed into a Russian entity via a presidential decree.

Shell as well as Mitsui ( MITSF ) and Mitsubishi ( MSBHF ) were then asked to

apply to keep their stakes if they wanted to.

Moscow invited firms interested in obtaining Shell's stake -

as well as Exxon Mobil's ( XOM ) abandoned share in the sister

Sakahlin-1 project - to submit applications to the government.

In 2022, Sakhalin energy accounted for almost 3% of global

LNG demand. Its cargoes mainly head to Japan, South Korea,

China, India and other Asian countries.

Last year, it produced more than 10 million metric tons of

LNG, down from 11.5 million tons in 2022.

($1 = 92.8375 roubles)