Tokyo Gas, the largest city gas supplier in Japan, has signed a long-term LNG agreement with the new Russian operator of the Sakhalin-2 project to keep supply volumes from the project, a spokesperson for the Japanese company told Reuters on Tuesday in a second such deal between a firm from Japan and the new operator.
Last week, the largest power generation firm in Japan, JERA, told Reuters it had signed a long-term LNG deal to maintain its supply from the Sakhalin-2 project.
Western majors hastened to announce they are abandoning joint projects in Russia after Vladimir Putin invaded Ukraine at the end of February. Some international companies have managed to exit their participation, such as Norway's Equinor, which said at the end of May that "The exit from all Joint Ventures has been completed in accordance with Norwegian and EU sanctions legislation related to Russia."
A decree from Putin stipulated in early July that a newly set up state Russian company take over the rights and obligations of Sakhalin Energy Investment Co., the joint venture running the Sakhalin-2 oil and gas project. Shell and Japan's Mitsui and Mitsubishi were minority shareholders in Sakhalin Energy Investment Co. Shell already said a few months ago it would leave the project and has since then been looking for buyers for its stake in Sakhalin-2.
Shell has already completed the sale of its retail and lubricants businesses in Russia to Lukoil, but hasn't exited the Sakhalin-2 LNG project yet.
In early August, the Russian government gave Sakhalin-2 minority foreign investors - Shell, and Japan's Mitsui & Co and Mitsubishi - one month to claim their stakes in a new entity that will replace the existing project. Shell has confirmed it is looking at ways to exit the project. The Japanese companies are expected to keep their stakes, Japan's Industry Minister Koichi Hagiuda has said, as carried by Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More