Business & Economy

Moscow approves Mitsui’s investment in Sakhalin 2 energy project

Tokyo, Aug 31 (EFE).- Russia approved the inclusion of Japan’s Mitsui & Co. among the investors of a newly established company to operate the Russian Sakhalin 2 energy project, the company said Wednesday.

Mitsui “submitted a consent on Aug. 25, 2022 to take ownership of shares in Sakhalin Energy LLC” and was “informed of the approval from the Russian government yesterday, August 30,” the Japanese company said in a statement.

“We will proceed with discussions in connection with acquiring ownership in the LLC,” it added.

Mitsui was one of the foreign partners in the consortium operating the Sakhalin-2 oil and gas project on the island of Sakhalin, separated from the northern Japanese island of Hokkaido by the La Perouse Strait.

Mitsui held a 12.5 percent ​​stake in the old operator and was seeking to keep the same stake in the new company.

In the end of June, Russian President Vladimir Putin signed a decree to transfer all rights to the Sakhalin-2 gas project from its 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.

Shell has already declared its intention to exit the project in the wake of the Russian invasion of Ukraine, but Mitsui and Mitsubishi chose to try to maintain their investment. Gazprom will keep its stake.

Mitsubishi is yet to comment on the matter.

Japanese Minister of Economy, Trade and Industry, Yasutoshi Nishimura, told journalists on Wednesday that Russia’s approval to hand over a 12.5 percent stake in the new company to Mitsui was very significant from the point of view of the stability of Japan’s energy supply.

Nishimura added that while the talks continue on the contractual conditions, the government will make every effort to seek a stable supply of liquefied natural gas (LNG) between the government and the domestic companies, in reference to the firms that have shown interest in continuing to buy Sakhalin gas, including Jera and Tokyo Electric Power.

The Sakhalin-2 project produced and exported 11.6 million tons of LNG in 2021, of which more than half – about 6 million tons – went to Japan.

The Asian country depends on imports for about 98 percent of the gas it consumes and Russia is its fifth largest supplier of the fuel.

Sakhalin-2 accounts for about 10 percent of the liquefied gas that Japan imports. EFE


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