La Prensa Latina Media

Japan explores alternatives after Russia nationalizes Sakhalin-2

Tokyo, Jul 5 (EFE).- Japan said Tuesday it is exploring alternatives to Russian gas after Moscow’s decision to nationalize the Sakhalin-2 gas project, from where most of its Russian imports of liquefied natural gas come.

Koichi Hagiuda, the minister of economy, trade and industry, announced his intention to raise the issue and look for ways to ensure a stable supply of gas for Japan during a meeting in Sydney with the energy ministers of the Quad, an alliance made up of the United States, Australia, India and Japan, scheduled to be held on July 13.

At a press conference in which he addressed Russia’s recent decision regarding the energy project, Hagiuda said that Japan needed to be prepared for everything since the start of the Russian invasion of Ukraine on Feb. 24.

Last week, Russian President Vladimir Putin signed a decree to transfer all rights to the Sakhalin-2 gas project from it operator, the Sakhalin Energy consortium, made up of the Russian company Gazprom (50 percent), British company Shell (27.5 percent), and the Japanese companies, Mitsui (12.5 percent) and Mitsubishi (10 percent), to a limited company set up by the Russian government.

Under the restructuring, foreign shareholders must ask the Russian government for a stake in the new firm within a month. Moscow will then decide if they will be allowed to keep their stake.

If they refuse the new conditions or are not permitted to keep their stake, Moscow will sell their shares within four months and “the money from the sale will be frozen in the Russian Federation in type “C accounts.”

Hagiuda stressed that the Russian presidential decree would not immediately stop LNG imports but declined to comment on the exact impact on supply.

He said that the Japanese government would carefully examine the requirements of the presidential decree together with the operators and carefully study the measures to be taken.

He added that Japan will continue to gather information and ask Russia for explanations through diplomatic channels.

Mitsui and Mitsubishi have not commented publicly on the matter.

Russia accounted for 8.8 percent of Japan’s LNG imports in 2021.

Most of the imports came from the Sakhalin-2 project, according to official data. EFE

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