World

Japanese Companies Could Soon Renew Deal With New Sakhalin 2 Project Operator, Reports Say

MOSCOW (Sputnik) - A number of Japanese companies are considering concluding a contract with the new operator of the Sakhalin 2 oil and gas project, Kyodo news agency reported on Friday, citing sources familiar with the matter.
Sputnik
The new operator, Sakhalin Energy LLC, which received the rights and obligations of the previous operator Sakhalin Energy Investment Company Ltd on August 19, was established on August 5 under a decree by Russian President Vladimir Putin in connection with the hostile actions of foreign states toward Russia.
During the work of the previous operator, Russian energy giant Gazprom held about 50% of shares, Shell - about 27,5% and Japanese trading houses Mitsui & Co. and Mitsubishi Corp. holding - 12.5% and 10%, respectively. The future of the previous shareholders is uncertain, all companies need to apply for a stake in the new operator by September 4.
According to the Kyodo news agency, Sakhalin 2 oil and gas project accounts for 9% of Japan's LNG imports and a renewal of contracts could mitigate the need for increasing fuel prices, which would be inevitable if the country was to seek alternative LNG sources.
On Wednesday, the Japanese Ministry of Economy, Trade and Industry has already asked Mitsui and Mitsubishi to consider further participation in the project, as Sakhalin-2 is an important energy provider for the country. Mitsui told Sputnik it would act accordingly and based on discussions with its partners and the state, and Mitsubishi said that there was no decision on the issue yet.
The Sakhalin-2 project is exploring two reserves in Russia's Far East in the northeast of the Sakhalin shelf in the Okhotsk Sea. The infrastructure includes three offshore platforms, an integrated onshore processing facility, an oil shipping terminal and an LNG plant with a capacity of 9.6 million tonnes per year.
Discuss