Russia: Mitsui & Co. & Mitsubishi Corp. to keep stakes in Sakhalin 2 following Japanese govt. plan to maintain investment in energy project
"Japan aims to maintain stakes in Russia's Sakhalin 2 energy project" 16 July 2022
Japan has decided to maintain its interests in the Sakhalin 2 oil and liquefied natural gas project in the Russian Far East, with the government coordinating with two Japanese stakeholders to that end, government sources said Saturday.
With the plan, Mitsui & Co. and Mitsubishi Corp. would keep 12.5 percent and 10 percent stakes, respectively, despite Russian President Vladimir Putin's signing of an order that sets up a new operating company to tighten its grip on the project.
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Japan, reeling from the effects of higher energy prices following Russia's war in Ukraine, might be forced to source LNG from the market at higher prices. Around 9 percent of Japan's LNG imports come from Russia, almost all of them supplied by Sakhalin 2.
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Besides Sakhalin 2, Japan also invests in the Sakhalin 1 project, with Sakhalin Oil and Gas Development Co. -- a Japanese consortium involving the Ministry of Economy, Trade and Industry, trading houses Itochu Corp. and Marubeni Corp., and others -- holding a 30 percent stake.
On June 30, Putin signed a decree to set up a new operating company for Sakhalin 2 affiliated with Russian energy company Gazprom, effectively putting it under Russian government control, with all staff and businesses transferred from the current operator Sakhalin Energy Investment Co.
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Gazprom owns a roughly 50 percent stake in Sakhalin 2, while British oil giant Shell PLC has approximately 27.5 percent, followed by Mitsui and Mitsubishi.
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