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Gazprom’s Sakhalin 2 LNG project forecast

to double revenue in 2023

RUSSIA STATE-RUN Russian energy giant Gazprom Reuters.
could see revenue double this year from its Deals have been renewed by Osaka Gas Co.
Asian buyers are driving Sakhalin 2 liquefied natural gas (LNG) project as Ltd, Japanese Hiroshima Gas, JERA, Kyushu
demand. a result of higher prices and long-term deals with Electric, Saibu Gas, Toho Gas, Tohoku Electric
Asian buyers, according to analysts and Reuters and Tokyo Gas. Additionally, South Korea’s
calculations. KOGAS continues to offtake LNG under its
Renewed deals with Asian buyers could 10-year contract.
secure demand for 6.5mn tonnes per year (tpy) Last year, Sakhalin 2 was forecast to produce
of LNG from the project located in Russia’s Far 11.4mn tonnes of LNG. Final figures have yet to
East, according to contractual volume data from be released. In 2021, Sakhalin 2’s revenue topped
the GIIGNL international group of LNG import- $5.7bn, with net profit surpassing $2bn.
ers and Reuters calculations. Asia spot LNG prices soared in 2022 aver-
Masanori Odaka, a senior analyst on Rystad aging $38.80 per million British thermal units
Energy’s gas and LNG team, told Reuters that (mmBtu), marking a 42% rise on 2021.
could generate between $3.8bn and $4.5bn in However, marketing additional volumes is
revenue this year. likely to face hurdles this year as spot prices in
Meanwhile, if Sakhalin 2 hits its output Asia are estimated to be higher than long-term
forecast and sells 4.9mn tonnes of LNG on the deals.
spot market, the project could bring in an addi- In 2022, China’s imports of LNG from Sakha-
tional $7.45bn this year, Alexie Kokin, chief lin 2 more than doubled to 33 cargoes, according
analyst with Russian brokerage Otkritie, told to data from Refinitiv Eikon. ™

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