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Japan’s Mitsubishi applies

to keep its stake in Russia’s

Sakhalin-2 LNG plant

JAPAN JAPAN’S Mitsubishi decided to apply to Russian end of August, Nikkei reports, citing its sources.
government to keep its stake in the Sakhalin-2 oil In addition to Mitsubishi another Japanese
and gas project but still needs Kremlin approval, company, Mitsui, is also a big stake holder. Rus-
Nikkei reports on August 25. sia’s Gazprom owned a majority 50% of the pro-
Russian President Vladimir Putin signed ject. Mitsubishi and Mitsui also own 10% and
a decree on June 30 that will transfer all rights 12.5% stakes in the project respectively.
and obligations of the Sakhalin-2 oil and gas The third investor Shell said earlier it would
project to a new Russian entity, in effect giving sell its 27.5% stake in the joint venture as part of
the Kremlin the power to nationalise foreigners’ plans to leave Russia altogether but has not yet
stakes in what is one of the largest energy pro- announced a decision on whether to apply to
jects in the world, and escalating the ongoing gas retain its stake ahead of the deadline that expires
wars. at the end of this month. If it does not apply it will
Sakhalin-2 in Russia’s Far East supplies circa be dispossessed.
4% of the global LNG market and is a key source Mitsui has not applied to retain its stake but
of energy for Asian countries and Japan in par- Nikkei reports it intends to do so, the newspaper
ticular, which is heavily dependent on LNG said, adding that the Russian side will have three
imports. Russia accounts for 8.8% of Japan’s days to make a final decision on their participa-
import of liquefied national gas, almost all of tion in the project with the new operator upon
which comes from Sakhalin-2. Japan has been the receipt of their notifications.
a partner in the project for decades. At the same Russian Prime Minister Mikhail Mishustin
time Japan has condemned Russia’s invasion of signed a resolution on establishing Sakhalin
Ukraine and supposed Western sanctions on Energy LLC as a new operator of the Sakhalin-2
Russia. PSA project operator with registration in Yuzh-
Putin’s decree stipulates that Gazprom will no-Sakhalinsk on August 2. Andrey Oleinikov,
keep its majority stake, but foreign investors CEO of Sakhalin Energy subsidiary, a current
must ask the Russian government for a stake in project operator, will be the new operator’s top
the newly created firm within one month or be executive, Tass reports.
dispossessed. Tokyo Gas and JERA, a joint venture of Tokyo
Putin has been using its market power in the Electric Power and Chubu Electric Power, have
energy business as his weapon in the economic already signed contracts with the new Russia
war with the west. This week analysts estimated project operator to receive fuel. With Europe
that Europe has already spent an additions importing record amounts of LNG to fill its
$278bn on energy since the start of the conflict storage tanks ahead of winter the LNG market is
and is expected to pay the same again over the extreme tight that has driven up prices and LNG
winter. is in short supply as Europe and Asia compete for
Now Japan has applied the Russian govern- the same gas.™
ment is expected to announce its decision by the

P8 www. NEWSBASE .com Week 34 24•August•2022