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Toho Gas next Japanese buyer to

sign new contract with Sakhalin-2

CONTRACTS TOHO Gas has become the latest Japanese Sakhalin-2 operator, including Jera, Kyushu
gas buyer to renew its contract for LNG from Electric Power, Hiroshima Gas and Tokyo Gas.
the Sakhalin-2 project in Russia, local media Likewise, the contractual terms including vol-
reported on September 20. umes are reported to be the same.
According to the Kyodo media newspaper, Japan’s government exerted pressure on Mit-
Toho Gas will continue to procure 500,000 sui and Mitsubishi to maintain their positions
tonnes per year (tpy) of LNG until 2033, having at Sakhalin-2, because of concerns about the
agreed the new contract with Sakhalin-2’s new potential loss of gas supply from the project. Like
state-established operator. The contractual terms many other countries, Japan is in the grip of an
remain the same. energy crisis, and it is the biggest buyer of gas
A state-backed entity assumed control of the from the Russian terminal, given its close prox-
Sakhalin LNG project in mid-August, replacing imity. The government had voiced concerns that
the international consortium Sakhalin Energy if Japanese companies left, gas from the facility
Investment as operator. The Russian government would be sent to Japan’s geopolitical rival China
had earlier accused the foreign partners at the instead.
project – Shell and Japan’s Mitsui and Mitsubishi In the wake of the 2011 Fukushima nuclear
– of violating their shareholder obligations. disaster, Japan began turning off its nuclear
Russia’s Gazprom automatically retained the power plants, (NPPs) and replacing much of
same majority shareholding in Sakhalin-2’s new that baseload energy supply with gas-fired gen-
operator as it did in its previous one. Mitsui and eration. But the global gas crisis has exposed the
Mitsubishi have agreed to take stakes in the new country’s overreliance to imported LNG. The
entity, but Shell is yet to announce its decision. government said in August it would restart some
The Anglo-Dutch major has vowed to withdraw idle nuclear reactors, and potentially increase
from Russia in light of its invasion of Ukraine. the lifespans of ones still in operation and build
Other Japanese energy companies have new-generation units.™
also signed supply agreements with the new

P8 www. NEWSBASE .com Week 39 30•September•2022