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.
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.
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.
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.